The Banks Are Winning One Battle. Here Is What That Means for the Other.

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Two Fights, One War

On March 5, 2026, the American Bankers Association formally rejected a compromise the White House had spent weeks brokering on the CLARITY Act, the crypto market structure bill currently stalled in the Senate.

The US banking industry is fighting the crypto sector on two fronts at the same time. In Congress, it is blocking legislation that would give crypto companies a statutory framework to operate under federal law. At the OCC, it is opposing a wave of charter applications that would give those same companies a regulatory home inside the federal banking system. The outcome of each fight shapes the other. And right now, the banks are winning the legislative one.

What the CLARITY Act Actually Is

The Digital Asset Market Clarity Act of 2025 passed the House on July 17, 2025, by a 294 to 134 vote. The bill would establish which federal agency supervises which type of digital asset. Bitcoin and similar commodities would fall under the Commodity Futures Trading Commission. Assets that qualify as securities would remain under SEC jurisdiction.

The division is designed to remove the regulatory ambiguity that has left crypto companies uncertain for years about which rulebook applies to their products.
The Senate Banking Committee was scheduled to debate and vote on amendments in January 2026. The hearing was postponed indefinitely. The White House set March 1 as a deadline for negotiators to deliver compromise language. That deadline passed without a published text.

On March 3, President Trump posted on Truth Social that banks were holding the bill hostage and warned that failure to pass it would drive the crypto industry to China and other countries. Two days later, the ABA rejected the White House compromise anyway.

The Specific Fight: Stablecoin Yield

The public stalemate centers on a single provision: whether stablecoin issuers and crypto platforms can offer yield on dollar-denominated tokens like USDC.
Banks have opposed this from the start. Their argument is specific. If a platform like Coinbase offers four or five percent annual yield on stablecoin holdings, and a traditional savings account pays a fraction of a percent, depositors have a straightforward reason to move money out of banks.

Standard Chartered analysts previously estimated that a yield provision, if enacted, could redirect up to $1 trillion in deposits away from traditional banks toward stablecoin products by 2028.

The White House proposed a compromise: allow stablecoin yield in limited contexts, specifically peer-to-peer payment activity, while prohibiting yield on idle balances. Crypto firms accepted it. Banks did not.

What Is Actually Still Happening Behind Closed Doors

The Reuters report describes a stalemate. The full picture is more complicated.

What the ABA rejection did was close the door on the specific White House compromise. It did not close the door on the legislation itself. Congress has passed bills over banking lobby opposition before. The question is whether enough Senate votes exist to do it again, and whether the legislative calendar allows time before midterm pressures take over.

The Calendar Problem

There is a third factor in the timeline that has received less attention than it deserves.
On the same days that crypto legislation was stalling in Washington, the United States was conducting military strikes against Iran. The Trump administration described the operation publicly. The strikes disrupted air travel across the Middle East and raised immediate questions about shipping through the Strait of Hormuz.

Brian Gardner, chief Washington strategist at Stifel, wrote in a note published this week that the conflict is making it significantly harder for Congress to dedicate attention to crypto regulation. His assessment: the legislative calendar is now working against the bill.

Congress has a fixed number of working weeks before the midterm election cycle begins to dominate the schedule. Defense and foreign policy responses to an active military operation consume floor time, committee attention, and political capital. The CLARITY Act was already running behind.

What Happens If the Bill Dies

This is the question that connects directly to the OCC charter wave we reported on earlier this week — eleven companies filing for or receiving federal trust bank charter approvals in eighty-three days, with a new OCC rule taking effect April 1.

A federal trust bank charter is not the same as a statute. It does not resolve the securities versus commodities classification question the CLARITY Act was designed to settle. It does not give crypto firms the legal certainty that comes from an act of Congress.

What it does give them is a federal regulator, national operating authority, and a direct path to infrastructure they previously rented through partner banks. For companies that have been waiting for the legislative route to produce results, the regulatory route is increasingly the practical alternative.

The more the CLARITY Act stalls, the more valuable an OCC charter becomes. Banks understand this. Their opposition to both the legislation and the charter wave is the same calculation applied to two different battlegrounds.

The Fintech Industry’s Narrowing Options

The companies filing for OCC charters are not doing so as a fallback while they wait for Congress. Several of them — Circle, Ripple, Coinbase — have also been among the most active lobbyists for the CLARITY Act. They are pursuing both routes because both are open, and because they cannot afford to bet the business on either one alone.

If the CLARITY Act passes with yield provisions intact, stablecoin issuers gain a statutory green light to compete directly with bank savings products. If it passes without yield provisions, they get regulatory clarity but lose the competitive tool banks were most afraid of. If it does not pass at all, the OCC charter becomes the primary vehicle for federal legitimacy, and the stablecoin yield question gets resolved through a future rulemaking rather than legislation.

None of those outcomes eliminates the crypto sector. All of them change it.

Where This Goes

The Senate Banking Committee’s next move will tell the story. A markup scheduled and held in March means the bill survives into April with real momentum. A markup postponed again means the calendar argument wins and the bill waits for the next Congress.

The banks have rejected one compromise. They may be presented with another, with different language on yield restrictions. They may also be told, through vote counting, that Senate Republicans have decided to pass the bill without their support.
Two fights. One war. The outcome of each shapes what American finance looks like in five years.

Editor’s note: We are committed to accuracy. If you spot an error, a missing detail, or have additional information about any of the companies or filings mentioned in this article, please email us at [email protected]. We will review and update promptly.