Miles Jennings, a16z crypto policy head and general counsel, stated in an interview that some banks do not want the "Cryptocurrency Market Structure Bill" (CLARITY) to become law; he has yet to see specific evidence for banks' claims that "stablecoin rewards will lead to deposit outflows."

He pointed out that relying solely on actions from the SEC cannot provide founders with certainty that spans presidential terms; if the approach of "enforcement instead of legislation" from Gary Gensler's era continues, crypto entrepreneurial activities may still be pushed out of the U.S. He previously wrote that the GENIUS Act has come into effect and opened the door for dollars on-chain, while blocking CLARITY allows intermediaries to continue paying yields on stablecoin deposits under GENIUS—this is precisely the outcome that banks are lobbying to prohibit. Six industry associations, including the American Bankers Association and the Bank Policy Institute, are calling for tighter restrictions on "interest-like rewards," claiming they will siphon off deposits that support small businesses, mortgages, and agricultural loans. JPMorgan CEO Jamie Dimon has publicly called for stablecoins to be subjected to the same scrutiny and identity verification as banks.

The Senate Republicans have released a revised text of about 630 pages, just days before the procedural vote on September 15. Cynthia Lummis stated that over 114 amendments proposed by Democrats have been incorporated, including a definition for "decentralized finance trading protocols": if individuals or collaborative groups have the authority to directly or indirectly control or materially change the protocol's functions, operations, or consensus rules, they must register with the Commodity Futures Trading Commission (CFTC), which will write rules in conjunction with the Treasury, while also adhering to the Bank Secrecy Act. The decentralized finance provisions have been narrowed to spot and cash digital commodity trading in response to concerns from indigenous tribes regarding prediction markets, and to clarify the digital asset activities that credit unions may engage in.

The ethical provisions have not undergone significant changes and will still be enforced by the Department of Justice, rejecting proposals from Democrats and Republican Senator Thom Tillis to grant state attorneys general more authority and establish stricter conflict of interest prohibitions. Issues surrounding stablecoin yields, illegal finance, and conflicts involving the Trump family's crypto assets remain negotiation obstacles. The Republicans currently hold 53 seats, and advancing the procedure requires 60 votes; reports indicate that no Democratic senators have co-sponsored the revised draft as of its release.

In terms of market mechanisms, the obstructionists are the banking lobby groups wanting to maintain low-interest deposits, while the proponents are exchanges, stablecoin intermediaries, and venture capitalists seeking legislative certainty. The driving force is the voting window on September 15, not on-chain data. Funds will continue to follow GENIUS's third-party rewards until legislation is passed; once CLARITY is approved, the scope of rewards will be written into the ban, allowing institutions to enter the on-chain market. Beneficiaries will be deposit institutions that can keep dollars on their balance sheets or crypto intermediaries that can write compliant pathways into the legislation—depending on whether the 60 votes can be secured.

Source: Public Information