Senate Delays Stablecoin Bill as Banks Fight ₱91.16 trillion ($1.5 trillion) Deposit Loss

The Senate Banking Committee failed to schedule an April markup of the Clarity Act, pushing the stablecoin legislation debate into May. Republican Senator Thom Tillis requested more time to consult banks on whether stablecoin issuers should be allowed to offer yield to holders. The delay comes as traditional banks argue that competitive returns on stablecoins could drain deposits from their accounts.

Meanwhile Galaxy Digital Head of Research Alex Thorn said the odds of the Clarity Act being signed into law in 2026 are roughly 50-50, and possibly lower. He warned that if the markup slips past mid-May, the probability of enactment will drop sharply due to the legislative calendar constraint of the November midterm elections. Polymarket odds for passage dropped from 82% in February to 47% as of this week.

The White House published an economic analysis in April showing that eliminating stablecoin yield would boost bank lending by just ₱127.62 billion ($2.1 billion). That represents 0.02% of total lending, with 76% of the modest increase going to large banks. Community banks would add ₱30.39 billion ($500 million) in loans, a 0.026% increase. The same analysis calculated a net welfare cost of ₱48.62 billion ($800 million) from blocking stablecoin yield.

Standard Chartered forecasted in January that banks will lose ₱91.16 trillion ($1.5 trillion) in deposits to stablecoins by 2028, regardless of whether yield is permitted. The bank's forecast assumes stablecoins continue growing even without direct interest payments to holders. President Trump told memecoin holders at Mar-a-Lago over the weekend that he wants the Clarity Act passed and would sign it immediately. The bill would close loopholes in the Genius Act, which Trump signed last July requiring stablecoin reserves backed one-to-one by dollars, federal reserve notes, insured deposits, short-term Treasuries, or money market funds.