Efforts to pass new cryptocurrency legislation in the United States have encountered fresh obstacles after banks rejected a compromise proposal backed by the White House, raising doubts about whether the bill will be approved this year.
The development has drawn criticism from Donald Trump, who accused lenders of attempting to undermine the administration’s crypto agenda. Posting on Truth Social on Tuesday evening, Trump said the government would not allow the banking industry to derail plans to reform digital asset regulations.
“We are not going to allow them to undermine our powerful Crypto Agenda,” the president wrote.
Cryptocurrency companies have long argued that they operate in a regulatory gray area in the United States, which they say limits innovation and business growth.
The proposed Clarity Act aims to create a clearer regulatory framework for digital assets, a move supporters believe would boost cryptocurrency adoption and investment.
However, the bill has faced resistance from banks. The legislation stalled earlier this year after financial institutions opposed a provision that would allow stablecoin issuers and crypto platforms to offer yield-bearing products and rewards to users.
Banks fear such incentives could attract customer deposits away from traditional institutions, potentially weakening their ability to fund loans and other financial services.
Major cryptocurrency firms such as Coinbase have argued that offering rewards is necessary to attract users and remain competitive.
Meanwhile, analysts at Standard Chartered have estimated that stablecoins could draw as much as $500 billion in deposits from U.S. banks by the end of 2028.
In an attempt to resolve the dispute, the White House proposed a compromise that would allow stablecoin rewards in limited cases, such as peer-to-peer payments, but not on idle holdings.
While crypto companies reportedly accepted the proposal, banks said the compromise still posed risks to deposit stability and therefore could not support it.
The American Bankers Association said lenders had offered alternative ideas that would advance the legislation without threatening the banking system.
“The risks to economic growth and financial stability are real if policymakers don’t get this right,” the association said in a statement.
The deadlock has raised concerns that the bill may fail to pass this year. The legislation must still clear the U.S. Senate Banking Committee and navigate other political disagreements before reaching Congress for final approval.
Analysts say the timeline is tight, as lawmakers will soon leave Washington, D.C. to begin campaigning for the upcoming U.S. midterm elections.
According to Adrian Wall, managing director of the Digital Sovereignty Alliance, the window for passing the bill could close by mid-year.
“If this doesn’t get passed and put in front of the President’s desk by July, the opportunity may be gone because of the midterms,” he said.
