Congress faces a choice: drain the savings of millions of Americans out of local banks and credit unions to meet the demands of well-funded crypto players, or create fair rules for the entire financial system. Those are the stakes of a new digital assets bill being debated in Congress.
We’re closer than ever to establishing the first comprehensive regulatory framework for digital assets, known as the CLARITY Act. Senate leaders are signaling that the bill could reach the floor in the coming weeks, even as lawmakers continue to debate whether the bill has enough bipartisan support to become law.
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That urgency is understandable. Digital assets are becoming part of how more Americans save, invest, and move money — and there’s nothing wrong with that. The country needs clear rules, and America should lead in digital assets innovation.
AMERICA’S DIGITAL BLIND SPOT: WHY THE CLARITY ACT IS A NATIONAL SECURITY IMPERATIVE
Importantly, lawmakers have not addressed one issue that could have consequences far beyond the crypto industry: stablecoin yield.
Stablecoins have the potential to improve payments by making transactions faster, cheaper, and easier to settle. That is a worthwhile policy goal, and Congress is right to encourage responsible innovation. But there is a big difference between setting new rules for novel payment technologies and opening the back door for crypto firms to become banks. That line is crossed when the crypto world is given the ability to offer what are effectively interest-bearing savings accounts.
In practice, stablecoins would be able to imitate the mechanics of interest on a savings account while operating outside any of the protections Americans associate with traditional financial products.
Bank deposits are protected by federal deposit insurance up to legal limits in the event an insured bank fails. Crypto assets do not provide the same protection. A consumer who moves money onto a crypto platform because it offers an attractive interest payment may not realize that the product does not come with the same guarantees around federal insurance, access to funds, dispute resolution, disclosures, or regulatory oversight.
Worse yet, this yield hazard may have broader economic implications.
America’s banking system does more than safeguard deposits. It transforms those deposits into mortgages, small business loans, farm credit, car loans, and other forms of consumer credit. That local credit is part of the basic plumbing of the American economy. Yield-like payments that are not collateralized by bank deposits do not provide the same infrastructure. Worse yet, if they start pulling money away from the institutions that fund local lending, it would weaken the flow of credit to communities across the country.
America’s economy runs on access to credit. Families buy homes, small businesses expand, and employers make payroll because money deposited in trusted banks and credit unions flows back into communities.
If stablecoin platforms induce billions of dollars to flow out of savings accounts to instruments outside the traditional regulatory framework, those funds won’t flow back into local lending. Treasury has indicated that as much as $6.6 trillion would move out of Main Street investments and into the coffers of crypto exchanges.
This is not a speculative concern. A 2025 Federal Reserve analysis found that stablecoin adoption could displace or restructure bank deposits, raise banks’ funding costs, and constrain credit provision depending on how widely stablecoins are adopted and how issuers hold their reserves.
If a thinly regulated new product encourages consumers to park their money somewhere in exchange for an interest payment, policymakers should demand answers to basic questions: Is the consumer’s money federally insured if the company fails? Where will Main Street turn for financing? What disclosures are required? Can the customer get money back quickly in times of stress? Who resolves disputes? Which regulator is responsible?
Legislating first and asking these questions later undermines commonsense consumer protections that should guide all thinking about financial regulation.
CRYPTO CLARITY: TIME FOR WASHINGTON TO TAKE THE FUTURE OF MONEY SERIOUSLY
The best version of digital asset legislation would close the yield loophole and allow stablecoins to develop as payment instruments without letting interest-like payments blur the line between a payment product, an investment product, and a bank account.
The Senate has a real opportunity to bring clarity to digital assets. But clarity should mean consumers understand what they are using, innovators know what rules apply, and Main Street does not lose access to the credit it needs.
Mattie Duppler is the spokeswoman of The Ledger Project, a new voice built to promote the essential role financial services play in driving American economic growth. After years leading Amazon’s first large-scale public affairs function — and winning some of the highest-profile policy fights — she’s had a front row seat to how policymakers arrive at the most critical economic and regulatory decisions affecting Americans today.
