Miles Jennings, a16z crypto's head of policy and general counsel, argued that traditional finance efforts to block the CLARITY Act are self-defeating. Without the market-structure bill, crypto intermediaries will continue offering yield on stablecoin deposits—an outcome banks have lobbied to stop.
The Digital Asset Market Clarity Act (H.R. 3633) aims to delineate regulatory oversight for digital assets, assigning jurisdiction between the SEC and CFTC.
On May 14, the Senate Banking Committee voted 15-9 to advance the bill. Six banking trade groups—including the American Bankers Association and the Bank Policy Institute—then called for the bill to prohibit interest-like rewards on stablecoins, arguing that without such restrictions, stablecoin offerings could divert bank deposits and threaten local lending activity.
The GENIUS Act, signed into law in 2025, already established a federal framework for payment stablecoin issuers, reserves and audits. Jennings said the legislation opened the door for dollars to move on-chain, with other real-world assets expected to follow regardless of whether the CLARITY Act passes.
Jennings said the CLARITY Act gives TradFi institutions a pathway into the on-chain economy, including participation in permissionless DeFi protocols—an opportunity they would forgo without the bill.
The same six banking groups renewed their demands July 22 after the Senate released an updated draft, saying it still jeopardizes local lending.
Jennings attributed the banking sector's stance to internal incentives rather than strategy. Defending the status quo carries no professional penalty for most TradFi organizations, he said, while embracing change and facing potential missteps could. He added that many institutions see DeFi as a threat because it removes intermediaries, while more strategically minded firms recognize it as a tool to deliver chea more efficient services.
More than 200 crypto companies and lobbying groups have urged Senate leaders to schedule a floor vote without delay. The bill is currently awaiting floor time.
Galaxy Digital research head Alex Thorn cut his odds of the bill passing in 2026 from 75 percent to 60 percent, citing a shrinking legislative calendar and unresolved provisions on ethics and illicit finance.
