Talks over a landmark U.S. crypto regulation bill have stalled again, raising doubts about whether major cryptocurrency legislation will pass before the midterm election cycle intensifies.
Banks rejected a compromise proposed by the White House, arguing that it could trigger massive deposit outflows if crypto platforms offer reward-based financial products.
President Donald Trump criticized the banking industry, accusing lenders of trying to undermine his administration’s “powerful Crypto Agenda” aimed at expanding digital asset adoption.
The proposed Clarity Act seeks to end regulatory uncertainty by defining when crypto tokens are securities, commodities, or other asset classes.
Banks previously blocked the bill over concerns that stablecoin rewards and incentives could draw deposits away from traditional lenders, weakening their ability to fund loans.
Crypto companies such as Coinbase support offering rewards to attract customers, while analysts warn stablecoins could shift up to $500 billion in bank deposits by 2028.
Although crypto firms accepted the White House compromise, banks insist the proposal still risks destabilizing deposits, leaving lawmakers divided over the bill’s future.
With Senate negotiations unresolved and midterm elections approaching, analysts warn the legislative window may close by July, potentially delaying comprehensive U.S. crypto regulation for years.
