Patrick Witt Challenges Banking Coalition Over Stalled CLARITY Act

Witt’s criticism follows a letter sent by banking leaders to the Senate, requesting that Section 10404 of the CLARITY Act be expanded to include bans on rewards, bonuses, and other incentives. While the bill already prohibits stablecoin issuers from paying direct interest, the banking group claims that without broader restrictions, platforms could still offer benefits that mirror traditional interest, potentially siphoning deposits away from community banks.

Signatories, representing institutions including Bank of America and U.S. Bank, argue that these outflows threaten the availability of credit for local businesses and farmers. Witt countered these claims on social media, pointing to the inherent contradiction in banks opposing a bill that already codifies their stated goals regarding interest payments. Notably, the industry remains split; Goldman Sachs CEO David Solomon has distanced his firm from the coalition by expressing support for the legislation.

Time is rapidly running out for the bill, which combines Senate Banking and Agriculture committee frameworks to regulate digital commodity spot markets. With Senate Majority Leader John Thune prioritizing federal nominees and the Lindsey O. Graham Sanctioning Russia Act of 2026, the legislative window before the August 8 recess is closing. Industry participants are now pushing for a procedural vote before the break to gauge bipartisan support, hoping to avoid further delays in an already congested calendar.