US CLARITY Act Stablecoin Reward Provisions Stall as Banks Reject White House Compromise Over Deposit Flight Risk

Negotiations over stablecoin reward provisions in the U.S. CLARITY Act have stalled as banks reject a White House compromise, citing risks that deposits could shift from traditional banks to higher-yield digital dollars, Coingape and Cointelegraph report. Negotiators are weighing caps on reward rates or dollar amounts, stricter reserve and segregation rules, and enhanced consumer-protection and anti-money-laundering measures, with law firm Baker McKenzie describing the process as entering a more technically complex second phase focused on differentiating issuer, platform, and protocol-level returns. Standard Chartered analysts estimate that broadly permitting stablecoin rewards could drive up to $500 billion in cumulative bank deposit outflows by end-2028, a scenario the American Bankers Association says underscores financial-stability risks, while Coinbase and CEO Brian Armstrong criticize current drafts as favoring incumbent banks and limiting competitive, compliant stablecoins, Fox Business reports. The White House is urging a deal, and Senate Democrats have faulted Republicans for advancing GOP-drafted language without sufficient bipartisan input, while committee staff continue to negotiate reward caps, issuer-versus-platform obligations, and disclosure standards, with the stablecoin title seen as key to broader market-structure progress, according to The Block and Yahoo.