The White House’s crypto adviser has said banks should not feel threatened by crypto companies offering yield on stablecoins. Patrick Witt described the debate as an unfortunate sticking point in negotiations over the CLARITY Act, arguing that allowing crypto platforms to share yield with customers does not undermine the traditional banking model or create an unfair advantage.
Witt emphasized that banks are equally capable of offering stablecoin-related products to their clients. In fact, several financial institutions are already applying for regulatory approvals to expand into digital asset services. Rather than resisting the trend, he believes banks will eventually integrate stablecoin products into their offerings and use them to broaden customer engagement and revenue streams.
The dispute over stablecoin rewards has become one of the most significant obstacles to passing the CLARITY Act. The proposed legislation aims to clearly define regulatory authority between the SEC and the CFTC while establishing a formal asset classification framework for cryptocurrencies. However, ongoing disagreements between the banking sector and crypto industry participants have slowed progress.
Lawmakers and officials have also warned that time is running short. With the 2026 U.S. midterm elections approaching, political momentum for crypto regulation could fade. Witt stressed that the current window for passing comprehensive digital asset legislation remains open — but it is narrowing quickly.
