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

The American Bankers Association (ABA) has formally rejected a White House-brokered compromise on the Digital Asset Market Clarity Act of 2025, further stalling the crypto market structure bill in the Senate. This legislative deadlock centers on bank opposition to stablecoin yield provisions, which analysts suggest could redirect up to $1 trillion in deposits away from traditional institutions by 2028. As the legislative path narrows due to a crowded congressional calendar and geopolitical tensions, crypto firms like Coinbase and Circle are increasingly pursuing federal trust bank charters from the OCC to secure regulatory legitimacy.

On March 5, 2026, the ABA blocked a compromise intended to advance the CLARITY Act, a bill that previously passed the House in July 2025 with a 294-134 vote. The legislation seeks to resolve regulatory ambiguity by placing commodities like Bitcoin under the Commodity Futures Trading Commission (CFTC) while keeping securities under SEC jurisdiction. However, the banking lobby remains steadfast against a provision that would allow stablecoin issuers to offer yield on dollar-denominated tokens like USDC. Banks argue that if platforms offer competitive interest rates compared to traditional savings accounts, it could trigger a massive migration of capital, with Standard Chartered analysts estimating a potential $1 trillion shift away from traditional banks.

The White House attempted to bridge this gap by proposing that yield be permitted only for peer-to-peer payment activities rather than idle balances, a middle ground accepted by crypto firms but dismissed by the ABA. This stalemate is exacerbated by external pressures, including recent U.S. military strikes against Iran that have diverted congressional attention toward defense and foreign policy. Brian Gardner, chief Washington strategist at Stifel, noted that the resulting disruption to the legislative calendar makes it increasingly difficult for the Senate Banking Committee to hold necessary markups before the midterm election cycle begins to dominate political priorities.

In response to the legislative gridlock, the fintech sector is pivoting toward the Office of the Comptroller of the Currency (OCC). In just 83 days, eleven companies—including Circle, Ripple, and Coinbase—have filed for or received federal trust bank charters, ahead of a new OCC rule taking effect on April 1. While these charters do not provide the same statutory certainty as the CLARITY Act regarding asset classification, they offer firms national operating authority and direct access to financial infrastructure. This dual-track strategy highlights a shift where the regulatory route is becoming a practical alternative for firms that cannot afford to wait for a divided Congress to act.