- The banks’ side in the Clarity Act negotiations refuses to accept the White House’s suggested compromise.
- Trump’s crypto advisor, Patrick Witt, called out JPMorgan CEO Jamie Dimon for his misleading comments about stablecoin yields.
US President Donald Trump has recently put pressure on banks in ongoing talks over the Clarity Act. However, the gatekeepers of traditional finance are reportedly not playing ball with the White House’s proposed compromise.
Along the way, White House digital asset advisor Patrick Witt has engaged JPMorgan Chase CEO Jamie Dimon in a war of words after Dimon criticized the crypto industry.
Clarity Act Negotiations Hit a Wall… Again
On Tuesday evening (UTC), Trump accused the banking side of the Clarity Act negotiations table of holding the draft bill “hostage.” He said he will no longer allow further delays in the discussions and urged them to cooperate for the sake of positioning the country as the “crypto capital of the world.”
So far, the White House has suggested a compromise to bridge the issues of the negotiating parties. It pushed for rewards based on certain activities, such as peer-to-peer payments, but not on idle holdings.
According to Reuters, the crypto side of the dialogue was willing to navigate around that middle ground. However, banking representatives and supporting trade groups, urged by some senators, were not caving in. The source claimed they have maintained a firm stance against the current language of the draft bill out of confidence that they can still get a better deal from it.
Their primary concern lay on stablecoin rewards, which they believe could trigger trillions of dollars in deposit flight. The American Bankers Association (ABA) highlighted that lenders have already offered “constructive ideas” to advance the bill without introducing deposit risks.
Analysts warned that the big banks’ unwillingness to budge at a compromise endangers stretching the delays in the Clarity Act. The bottleneck casts doubt on whether it will pass this year.
White House’s Patrick Witt Criticizes JPMorgan’s Jamie Dimon
Amid another deadlock, Witt, the key figure brokering the Clarity Act conversation between big banks and crypto, has called out Dimon for his misleading remarks about the controversial stablecoin yields. The JPMorgan boss earlier told players in the digital asset business that if they want to offer such incentives to stablecoin holders, they should get a full banking charter.
Trump’s crypto advisor argued that Dimon’s framing of stablecoin yields as equal to deposit interests was misleading. He clarified that it was a fundamental mischaracterization of the technology.
Witt emphasized that most stablecoin rewards are generated programmatically through decentralized lending protocols or transaction fee distributions. It significantly departs from the traditional banking system’s fractional-reserve lending model, which lends out customer deposits for interest.
“The deceit here is that it is not the paying of yield on a balance per se that necessitates bank-like regulations, but rather the lending out or rehypothecation of the dollars that make up the underlying balance,” said Witt. “The GENIUS Act explicitly forbids stablecoin issuers from doing the latter.”
“Stablecoins ≠ Deposits,” Witt concluded.
