CLARITY Act faces 100+ amendments as bankers send 8,000 demand letters against stablecoin rewards

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The Senate Banking Committee’s crypto market structure bill is heading into CLARITY Act markup with more than 100 proposed amendments.

This is turning a long-delayed vote on the CLARITY Act into a test of whether a fragile stablecoin compromise can survive pressure from banks, Democrats, and crypto industry groups.

The final number of amendments has not been formally confirmed. However, the current markup amendment proposal puts it in the same range as the January effort, when 137 amendments were submitted before a planned committee vote was scrapped.

The size of the amendment pile underscores how unsettled the bill remains even after months of negotiations.

Banks force stablecoin rewards vote

The most consequential fight is over stablecoin rewards, the issue that helped stall earlier negotiations and now threatens to reopen the divide between crypto companies and the banking industry.

The Senate compromise would prohibit rewards on idle stablecoin holdings when those rewards resemble interest on bank deposits. It would still allow incentives tied to other stablecoin activity, such as payments or transactions.

That distinction was designed to keep stablecoins from becoming deposit substitutes while allowing firms to reward usage rather than passive balances.

Banks say the language does not go far enough. Their concern is that crypto exchanges and other intermediaries could structure rewards around stablecoin activity in ways that still pull deposits away from insured banks.

Banking groups have pushed senators to close what they view as a loophole and to prevent stablecoin issuers or affiliates from offering yield-like incentives that compete with bank accounts.

Sens. Jack Reed and Tina Smith reportedly filed an amendment to tighten that standard.

Their proposal would target rewards that are “substantially similar” to deposit interest, a formulation that could give regulators more room to block incentive programs that banks see as functionally equivalent to yield.

That amendment could become one of the clearest votes of the markup. Supporting it would move the bill closer to the banking industry’s position. Opposing it would preserve the Tillis-led compromise and signal that committee members are unwilling to use the market structure bill to further restrict stablecoin incentives.

The lobbying campaign around the provision has already intensified. Stand With Crypto, the Coinbase-backed advocacy group, said banking lobbyists sent 8,000 letters seeking to stop stablecoin rewards.

The group said its own advocates made 8,000 calls and sent 300,000 emails in recent months, and that supporters have contacted lawmakers almost 1.5 million times in favor of CLARITY.

On the other hand, traditional finance leaders are actively maintaining the pressure to ensure the amendment’s success.

Lorrie Trogden, president and CEO of the Arkansas Bankers Association, recently issued a public call to action. On X, she urged banking industry members to make their voices heard ahead of the Thursday markup.

These efforts reflect an unusually visible outside campaign for a committee markup. They also show how a technical debate over reward language has become a proxy fight over whether banks or crypto platforms will control the next layer of dollar-based payments.

Warren pushes ethics and Fed access limits

Meanwhile, the stablecoin fight is not the only pressure point Democrats are bringing into the markup.

Crypto skeptic Sen. Elizabeth Warren has reportedly filed more than 40 amendments, the largest individual batch among committee members.

Her proposals target several parts of the bill, but one of the most significant would prevent the Federal Reserve from granting master accounts to crypto companies.

A Fed master account gives an eligible institution direct access to the central bank’s payment rails.

Crypto firms have long sought clearer paths into the banking system, while regulators and banks have warned that granting direct access to novel financial firms could create new supervisory and stability risks.

Warren’s amendment would put that fight directly into the CLARITY Act debate. If adopted, it would limit crypto companies’ ability to use the market structure bill as a path to deeper integration with the Fed’s core payment infrastructure.

Notably, banking associations such as the Independent Community Bankers of America (ICBA) previously criticized the Federal Reserve Bank of Kansas City’s approval of a master account for the crypto exchange Kraken.

According to the group:

“Granting nonbank entities and crypto institutions access to the master accounts poses risks to the banking system.”

Meanwhile, Warren is also pressing the ethics argument that has become central to Democratic resistance.

The lawmaker has said that new crypto legislation should not move through the Banking Committee without stronger guardrails to address conflicts of interest involving President Donald Trump and his family’s crypto ventures.

That line of attack gives Democrats a broader political frame than just investor protection. It links the bill to concerns that public officials could benefit from policies that expand the digital asset market, especially if the legislation leaves gaps around affiliated projects, stablecoin activity or token holdings connected to political figures.

The ethics push complicates the Republican case for speed. Supporters argue the bill is needed to end regulatory uncertainty.

Warren and other skeptics argue that speed without additional safeguards could entrench conflicts before Congress has built a durable oversight framework.

DeFi and legal tender amendments widen the fight

Other Democratic amendments would expand the debate beyond stablecoins and ethics into the structure of decentralized finance and the legal status of crypto assets.

Sen. Mark Warner filed an amendment that would overhaul the bill’s decentralized finance provisions.

The latest CLARITY Act text attempts to define when a protocol is sufficiently decentralized and when an operator, platform, or intermediary should face bank-like compliance obligations.

That section is among the most technically sensitive parts of the bill because it determines whether some DeFi systems can operate outside traditional intermediary rules or must comply with reporting, monitoring, and anti-money laundering requirements.

Warner’s amendment signals that some Democrats remain uncomfortable with the bill’s treatment of DeFi.

Their concern is that broad exemptions for decentralized protocols could allow firms to avoid oversight by claiming that no central entity controls the system.

Crypto developers counter that rules built for custodial intermediaries cannot be applied cleanly to open-source protocols without forcing some projects offshore or shutting them down.

Reed also filed a separate amendment that would prohibit cryptocurrencies from being used as legal tender, including for tax payments.

That proposal would push against efforts by some crypto-friendly lawmakers to give Bitcoin or other digital assets a more formal role in public payments.

Together, the DeFi and legal tender amendments show that the impending markup will not be limited to one banking dispute.

Senators will also be asked to decide how much autonomy decentralized systems should have, how far crypto assets should be allowed to enter public finance, and whether the bill gives regulators sufficient authority to police risks across the market.

Crypto industry urges senators to hold the line

Despite all of these pressures, crypto industry groups are urging the committee to move the CLARITY Act forward without amendments that would weaken the compromise.

On X, the Blockchain Association and Crypto Council for Innovation have called the markup a defining moment for US leadership in financial technology.

Their argument is that the bill would replace fragmented enforcement-driven oversight with a statutory framework that lets companies build in the US under clearer rules.

Stand With Crypto has taken a more direct political approach, framing the bank-backed push against stablecoin rewards as an attempt to protect incumbents from competition.

The group’s campaign is aimed at showing senators that crypto supporters are organized enough to match the pressure coming from banks and trade associations.

For pro-crypto lawmakers, the challenge is holding together a coalition broad enough to get the bill out of committee while preserving language that can survive the Senate floor.

Republicans control the committee, but the broader bill will still need Democratic support to clear the broader Senate floor. That makes the markup both a policy negotiation and an early vote-counting exercise.