Major U.S. cryptocurrency exchanges and banking trade groups are locked in a high-stakes legislative battle over the CLARITY Act, a landmark bill that would formalize digital asset regulation. Coinbase, Kraken, and Gemini successfully lobbied lawmakers earlier this year to remove language from the bill that would have required exchanges to list only tokens “not readily susceptible to manipulation.” The exchanges argued the provision was overly broad and could hinder support for smaller or less liquid tokens, increasing legal and compliance risks. The Senate Agriculture Committee advanced its version of the legislation in January following these edits.
Simultaneously, the banking industry is pushing back against a compromise on stablecoin yield reached by Senators Thom Tillis and Angela Alsobrooks. In a letter sent Friday, six top banking trade groups—representing institutions ranging from Wall Street giants to community banks—warned that the proposed language contains loopholes allowing crypto firms to evade a ban on interest-like payments. While the compromise would prohibit rewards “economically or functionally equivalent” to interest on bank deposits, exceptions for governance, staking, and rewards tied to account balances remain. The banks demand the language be tightened, specifically striking references to account balances and changing the prohibition to “substantially similar” to yield.
The twin disputes underscore the deep divisions over how digital assets should be regulated. The CLARITY Act, which passed the House in July 2025, would expand the Commodity Futures Trading Commission’s (CFTC) authority over digital assets while the Securities and Exchange Commission (SEC) retains oversight of securities. The division of power directly affects exchange business models, token issuance, and market liquidity. With the Senate Banking Committee poised to vote on the bill in the coming weeks—and the legislative window narrowing ahead of the August recess and November midterms—both sides are intensifying their campaigns. Coinbase US policy vice president Kara Calvert said a committee markup is expected soon, and White House crypto adviser Patrick Witt reportedly targeted a July 4 House passage after a June Senate vote.
The outcome will determine not only how tokens are classified and listed, but also which firms gain a competitive edge under the new framework. For investors, the evolving standards highlight ongoing regulatory uncertainty and the significant influence of industry lobbying on the final shape of crypto legislation.
