Negotiations over a major U.S. cryptocurrency regulatory bill have reached a new impasse after banks rejected a compromise proposed by the White House, casting doubt on whether the long-awaited legislation can pass this year. The dispute has also triggered sharp criticism from President Donald Trump, who accused major lenders of trying to undermine his administration’s digital-asset agenda.
The proposed legislation, widely known as the Digital Asset Market Clarity Act, aims to establish a comprehensive regulatory framework for the rapidly growing cryptocurrency sector. The bill would clarify how digital assets are regulated, define the roles of federal agencies overseeing crypto markets, and provide rules governing stablecoins—digital tokens typically pegged to the U.S. dollar.
However, the latest negotiations stalled after banking industry representatives warned that a key provision in the bill could threaten traditional banking deposits. The disputed section would allow certain crypto platforms to offer yield or rewards on stablecoins, enabling users to earn returns on digital holdings without the funds being treated as bank deposits.
Major banks argue that such a system could encourage consumers to shift money away from traditional savings accounts into crypto-based alternatives. Industry groups warn that if stablecoins begin offering higher returns than banks, it could trigger large-scale deposit outflows, potentially weakening banks’ funding base and increasing financial-system risks.
Crypto companies and digital-asset advocates, however, strongly support the measure. They argue that allowing stablecoin yields would expand financial innovation and give consumers new ways to earn returns on digital savings. Many industry leaders say the lack of clear federal rules has already pushed investment and technological development overseas, reducing the United States’ competitiveness in the global crypto sector.
President Trump, who made support for cryptocurrency innovation a central theme during his reelection campaign, responded forcefully to the banking industry’s objections. Posting on his social media platform Truth Social, the president accused banks of trying to derail reforms designed to modernize the financial system.
“We are not going to allow them to undermine our powerful Crypto Agenda,” Trump wrote, criticizing lenders for resisting policies he says would strengthen U.S. leadership in financial technology.
The president has prioritized crypto regulation during his second administration, arguing that clearer rules could attract investment, encourage innovation, and position the United States as a global hub for digital assets. His administration has pushed Congress to move quickly on legislation that would provide regulatory certainty for cryptocurrency exchanges, stablecoin issuers, and blockchain companies.
Crypto firms are also pressing lawmakers to act quickly, warning that the political window for passing the bill may be closing. With midterm elections approaching, congressional attention is expected to shift toward campaigning and other policy priorities, which could delay crypto legislation for years.
The bill already passed the House of Representatives last year but faces a more difficult path in the Senate, where lawmakers remain divided over how aggressively digital assets should be regulated. In addition to the stablecoin debate, senators are still negotiating provisions related to consumer protection, anti-money-laundering requirements, and oversight authority between financial regulators.
If lawmakers fail to reach a compromise soon, analysts say the effort to create a comprehensive federal crypto framework could stall indefinitely. Such a delay could leave the United States operating under a patchwork of regulations while other global financial centers move ahead with clearer digital-asset rules.
For now, the clash between banks, crypto companies, and lawmakers has placed one of the most significant pieces of crypto legislation in years in uncertain territory, highlighting the broader struggle to balance financial innovation with stability in the evolving digital-asset economy.
