Federal Reserve (Fed) Governor Christopher Waller said on Monday that progress on the long‑anticipated crypto market structure legislation, commonly referred to as the CLARITY Act, appears to have stalled in Congress.
His remarks come as lawmakers remain divided over key issues, most notably stablecoin yield provisions and the Federal Reserve’s proposal for so‑called “skinny” master accounts, a topic earlier highlighted by Crypto In America.
Stablecoin Yield Fight Fuels CLARITY Act Stalemate
Waller’s comments quickly drew reaction from market observers. Crypto analyst MartyParty noted on X that the governor’s assessment reflects the ongoing deadlock surrounding the CLARITY Act.
According to MartyParty, the delay is not accidental. He argued that resistance from the banking sector has intensified, particularly around the treatment of stablecoin yields and rewards.
At the center of the dispute is whether crypto platforms such as exchanges and digital wallets should be allowed to offer interest‑like returns or incentives on stablecoins held by users.
Crypto industry advocates contend that yield‑bearing stablecoins encourage adoption, improve efficiency, and increase competition in the payments market. Banking groups, however, strongly oppose this view.
They argue that stablecoin yields pose a direct challenge to traditional bank deposits, warning that higher returns—often in the range of 3% to 5% or more, compared with near‑zero yields on many bank accounts—could trigger massive deposit outflows.
In MartyParty’s assessment, banks are concerned that passage of the CLARITY Act could move trillions of dollars onto crypto‑based payment rails, breaking what he described as the banking sector’s “closed‑loop system” and putting pressure on long‑established profit models.
Crypto And Banks Head Back To White House
Amid rising tensions, MartyParty also reported that the White House has scheduled a second meeting for Tuesday, February 10, aimed at easing friction between cryptocurrency firms and banks over stablecoin yield payments.
The meeting is expected to include senior policy officials rather than company chief executives, along with representatives from banking and crypto trade associations.
Another major point of contention is the Federal Reserve’s proposed “skinny” master account model. Under this framework, eligible fintech and crypto firms would be granted limited access to the Fed’s payment systems without receiving full banking privileges.
The debate around skinny accounts became especially clear through 44 comment letters submitted to the Federal Reserve. Crypto firms and industry groups generally expressed support, while banking organizations responded with caution or outright opposition.
Banking groups raised concerns about oversight and risk. The American Bankers Association (ABA) warned that many entities likely to qualify for payment accounts lack a long‑term supervisory track record and are not subject to consistent federal safety standards.
Governor Waller indicated that he hopes the Federal Reserve will be able to publish proposed regulations for skinny master accounts in the fourth quarter of this year.
Featured image from OpenArt, chart from TradingView.com