The U.S. CLARITY Act, a key legislative effort to establish comprehensive crypto regulations, has stalled due to a heated debate over stablecoin yield offerings. The dispute centers on whether stablecoin providers should be allowed to offer yield, with banks arguing that high stablecoin returns could divert deposits from traditional accounts, which currently offer minimal interest. Crypto firms warn that banning passive rewards could hinder stablecoin adoption and reduce liquidity on exchanges. The legislation, supported by the president, aims to clarify digital asset classifications and create a structured market framework. However, banking groups are lobbying to prohibit stablecoin rewards that resemble deposit interest, citing concerns over potential deposit outflows. Meanwhile, crypto exchanges like Coinbase and Kraken could face revenue declines if stablecoin balances and interest-sharing strategies are restricted. Despite the regulatory pressure, the crypto industry may adapt by restructuring reward programs or shifting yield offerings outside the U.S. The broader regulatory clarity sought by the CLARITY Act could ultimately support long-term growth and innovation, even if passive rewards are limited.