Talks on landmark crypto legislation have hit a new impasse after banks said they could not back a compromise pushed by the White House, a development that cast doubt on whether the bill will pass this year and sparked criticism from President Donald Trump who accused lenders of trying to undermine it. Trump, who courted crypto cash on the campaign trail and whose family has profited from its own token, has prioritized crypto reform during his second administration. On Tuesday evening, he took to his Truth Social platform to call out the banking industry. "We are not going to allow them to undermine our powerful Crypto Agenda," he posted.

The Clarity Act bill aims to create clear regulations that should help promote cryptocurrency adoption, say its supporters. The bill stalled in January because banks opposed a provision allowing stablecoin issuers and crypto firms to offer yield-bearing products and other rewards that could lure away bank deposits, making it harder for them to fund lending. Crypto giants such as Coinbase say they must be able to offer rewards to recruit customers, and barring them would be anticompetitive. The bank Standard Chartered has estimated, meanwhile, that stablecoins could pull around $500 billion in deposits out of U.S. banks by the end of 2028.

Crypto companies have come around to that compromise, but banks have said they cannot support it, said two of the people. Banks still want to severely limit activities for which rewards can be issued, said a senior White House official. A banking industry source said lenders believe the activities allowed under the compromise could still trigger deposit flight. Some senators back the banks' position and the industry believes that with their support it can get a better deal, the banking source said. A spokesman for the Senate Banking Committee, which ultimately holds the pen on the text, did not provide comment. In a statement, the American Bankers Association said lenders had offered constructive ideas to advance the bill without imperiling deposits. "The risks to economic growth and financial stability are real if policymakers don't get this right."

The stalemate highlights deepening tensions between crypto innovators and traditional financial institutions. While the White House seeks to balance innovation and stability, banks argue regulatory clarity must not come at the cost of systemic risks. With the Senate Banking Committee holding final authority, the outcome remains uncertain, though the deadlock threatens to stall progress on one of the most contentious issues in modern finance.