Federal Reserve Governor Christopher Waller said Monday that the CLARITY Act, a long-awaited crypto market structure bill, has stalled in Congress as lawmakers remain divided over stablecoin yield provisions and the Fed's proposed "skinny" master account framework.
What Happened: Crypto Bill Hits Wall
The impasse centers on whether crypto platforms should be permitted to offer interest-like returns on stablecoins held by users. Crypto analyst MartyParty said that the delay is deliberate, driven by banking industry resistance to stablecoin yields.
Industry advocates argue that yield-bearing stablecoins promote adoption and increase competition in payments.
Banking groups counter that returns in the range of 3% to 5% — compared with near-zero yields on many bank accounts — could trigger massive deposit outflows.
MartyParty said banks fear the bill could shift trillions of dollars onto crypto-based payment rails, undermining what he called the sector's "closed-loop system." He also reported that the White House has scheduled a meeting for Tuesday, Feb. 10, between senior policy officials and representatives from banking and crypto trade associations to address the standoff.
A separate flashpoint involves the Fed's proposed "skinny" master accounts, which would give eligible fintech and crypto firms limited access to Fed payment systems without full banking privileges.
The American Bankers Association warned in comment letters that many likely applicants lack long-term supervisory track records. Waller said he hopes the Fed can publish proposed regulations for the framework in the fourth quarter of this year.
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Why It Matters: Banks Fear Disruption
The CLARITY Act fight exposes a fundamental tension between the traditional banking system and the growing crypto payments sector. If stablecoin yield provisions survive, the legislation could redirect significant capital away from bank deposits and onto decentralized rails — a prospect that banking lobbies have spent months working to prevent.
The outcome of the White House meeting and the Fed's timeline on skinny master accounts will likely shape whether any version of the bill advances this year. For now, both sides remain entrenched.
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