The CLARITY Act, which aims to define how crypto markets are regulated in the United States, would prohibit exchanges and service providers from offering yield or rewards on dollar-backed stablecoins. Supporters frame the rule as a safeguard for financial stability, but opponents argue it removes a key feature that makes digital dollars competitive in global markets.
Key Takeaways
- •A proposed ban on yield-bearing stablecoins in the CLARITY Act is drawing strong criticism from crypto industry leaders.
- •Anthony Scaramucci argues the restriction could weaken the US dollar by making it less competitive than China’s yield-bearing digital yuan.
- •Banks support the ban to protect deposits, while critics say it prioritizes incumbents over global currency competitiveness.
That concern has grown louder as other major economies move in the opposite direction.
Scaramucci: This Helps Rivals, Not the Dollar
Anthony Scaramucci, the former White House Communications Director and crypto bull, has emerged as one of the sharpest critics of the yield ban. His argument is not about short-term crypto market effects, but about long-term currency competition.
Scaramucci interprets the restriction as a defensive move driven by traditional banks rather than a genuine risk-management decision. By stripping yield from US stablecoins, he says policymakers are protecting incumbents at the expense of innovation and global adoption.
In his view, digital money competes the same way any financial infrastructure does: users gravitate toward systems that offer better economic incentives. Removing yield makes US stablecoins less attractive by design.
China Changes the Equation
What elevates the issue, Scaramucci argues, is China’s approach. The People’s Bank of China has allowed commercial banks to pay interest on holdings of the digital yuan, effectively making China’s central bank digital currency yield-bearing.
Scaramucci’s interpretation is straightforward: when emerging markets choose between digital payment rails, yield matters. Faced with a non-yielding US stablecoin and a yield-generating digital yuan, economic logic may outweigh political alignment.
Yield as Financial Infrastructure
Scaramucci views stablecoins not as niche crypto products, but as global financial plumbing. Infrastructure that pays users, even modestly, spreads faster and embeds itself deeper into payment systems. Over time, that creates network effects that are difficult to reverse.
By banning yield, he argues, the US risks voluntarily weakening its own digital rails while rivals strengthen theirs.
Industry Concerns Echo the Warning
Similar concerns have been raised by Brian Armstrong, who has warned that prohibiting stablecoin rewards could undermine the dollar’s competitiveness in foreign exchange markets. Armstrong has argued that stablecoin yield does not meaningfully alter bank lending, but does influence global adoption of dollar-based digital assets.
Together, their message is that the debate is less about crypto risk and more about strategic positioning.
Why Banks Support the Ban
Traditional banks see the issue differently. Executives warn that yield-bearing stablecoins could pull deposits out of the banking system, reducing lending capacity and financial stability. That concern was recently highlighted by Brian Moynihan, who said stablecoins could trigger trillions of dollars in deposit outflows.
Scaramucci does not dispute the banks’ incentives. His criticism is that preserving the current banking model should not come at the cost of weakening the dollar’s future role in digital finance.
A Strategic Choice Still Unresolved
The yield ban originated in earlier legislation and was expanded under the CLARITY Act, turning it into a defining feature of the proposed framework. With the bill now stalled, the issue remains unresolved.
For Scaramucci, that pause is an opportunity. He sees the debate as a choice between protecting incumbents today or competing effectively tomorrow. In a world where digital currencies are becoming geopolitical infrastructure, he argues that banning yield may solve a domestic problem while creating a global one.