Banks Carpet-Bomb Senate With Over 8,000 Letters To Kill Crypto Yield Before Final CLARITY Act Markup: Report

• American Bankers Association (ABA) members reportedly sent over 8,000 letters to Senate offices urging tighter stablecoin yield rules ahead of Thursday’s CLARITY Act markup, according to Eleanor Terrett.
• Senators Reed and Smith filed an amendment with the banks’ preferred “economically or functionally equivalent” yield language, per Punchbowl’s Brendan Pedersen. 
• Senator Elizabeth Warren opposed the 309-page bill, citing zero ethics provisions and over a billion crypto gains for the Trump family.

American Bankers Association (ABA) members have reportedly sent over 8,000 letters to Senate offices, urging lawmakers to tighten stablecoin yield restrictions in the Digital Asset Market CLARITY Act ahead of Thursday's Senate Banking Committee markup.

According to journalist Eleanor Terrett, there was no “separate phone call campaign” by the banking industry, “urging lawmakers to fix the stablecoin yield compromise.” The pressure is focused on a single contested phrase. 

Moreover, according to Punchbowl’s Brendan Pedersen, Senators Jack Reed (D-RI) and Tina Smith (D-MN.) allegedly also filed an amendment ahead of Thursday's markup that will force senators to choose between cryptocurrency and banks. The amendment would include the bank's changes to stablecoin yield restrictions, making it a tough vote for bank-friendly Republicans, said Pedersen.

The Stablecoin Yield Fight Intensifies

ABA previously argued that permitting stablecoin issuers to offer yield could accelerate deposit outflows from banks, particularly smaller and community-based institutions. Allowing yield could raise the stablecoin market from around $300 billion today to as much as $2 trillion, the banking lobby warned.

The current bill is the result of a compromise reached by senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) to prohibit stablecoin issuers and affiliated cryptocurrency firms from paying interest.

According to the joint letter by ABA, banks are looking to change the current text to be “economically or functionally equivalent.” They said the current rendition leaves room for a broader standard that could include the cashback-style rewards programs. "Thursday is Thursday, and there are 24 members who will opine, and we still have 76 members left to go before this thing is finished," according to one banking leader, reported journalist Sander Lutz. 

Warren's Ethics Provision Pushback

The CLARITY Act text, a 309-page manager’s amendment issued shortly after midnight Monday by Chairman Tim Scott (R-SC), Senator Cynthia Lummis (R-WY.), and Tillis, also faces pushback from the panel’s ranking Democrat. Warren said the bill “stunningly includes zero provisions” to address ethical issues she linked to President Donald Trump’s family, pointing to over billions in crypto-related profits over the past year. 

The crypto industry has made the CLARITY Act the battleground to continue stablecoin reward programs with Coinbase (COIN) and Circle (CRCL) leading the way. Coinbase CEO Brian Armstrong has reportedly been making the rounds on Capitol Hill to iron out the issue.

Retail Users Are Optimistic

Retail traders are bullish on the CLARITY Act, with 49% of 3,500 participants in an ongoing poll on Stocktwits predicting the bill passes both chambers in 2026. Another 14% see the Senate clearing it while the House stalls, and just 7% are betting on a Senate Banking advance followed by a full-chamber punt. However, nearly one-third believe nothing meaningful will happen. 

One user on the platform said the CLARITY Act has “zero” chance of passing, pointing to the fact that only one Democrat voted for Kevin Warsh in the Senate as evidence that the bill will not get the seven Democratic votes it needs.

Committee members have until the end of the business day on Wednesday to file amendments. So far, the markup is tentatively scheduled for Thursday, May 14.

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