The crypto lobby has reacted furiously to the Senate's Clarity Act, particularly concerning regulations for stablecoin payments. Proponents of the Act argue it closes a payment loophole, a claim the crypto industry disputes.

Last year's Genius Act mandated stablecoin issuers, such as Circle, to back their tokens with secure assets like Treasury bills. The crypto industry contends this sufficiently mitigated risks, and further regulations would hinder free-market competition. However, the Clarity Act aims to address other risks, particularly stablecoins' entanglement with banks.

A key provision in the Genius Act prohibited stablecoin issuers from paying interest on user balances. This was intended to prevent stablecoin issuers from attracting deposits from small banks with high interest rates, thereby safeguarding banks' lending capacity to small businesses and preventing insolvency.