White House crypto policy adviser Patrick Witt has stated that banks should not feel threatened by cryptocurrency platforms offering yield on stablecoins to customers. In an interview with Yahoo Finance, Witt called it "unfortunate" that this practice has become a major point of contention, arguing it does not undermine the banking industry's business model or market share.
Witt emphasized that banks have the capability to offer similar stablecoin products and are already adapting. "They can also offer stablecoin products to their customers, just the same as crypto. This is not an unfair advantage in either way," he said, noting that many banks are applying for OCC charters to offer bank-like digital asset services. He believes the future holds cooperation, with banks leveraging stablecoins to develop new products and expand their businesses.
The debate over stablecoin yield—where platforms share earnings from reserve assets with holders—is a central pain point delaying the passage of the CLARITY Act. This landmark bill aims to establish clear regulatory jurisdiction between the SEC and CFTC and create a taxonomy for crypto assets, including stablecoins.
However, the legislative process faces a critical deadline. Both Witt and U.S. Treasury Secretary Scott Bessent warn that the 2026 midterm elections threaten to derail the bill. "There's a window here. The window is still open, but it is rapidly closing," Witt stated, with the White House Crypto Council aiming to get the CLARITY Act signed before the election cycle consumes political focus. Bessent added that if Democrats were to take the House, the prospects of a deal would "fall apart."
