a16z's Miles Jennings Says Banks Fighting the CLARITY Act Are 'Accelerating Their Own Obsolescence'

a16z crypto policy head Miles Jennings argued on X on Thursday that the banking industry's campaign against the CLARITY Act will backfire, because blocking the bill leaves in place the stablecoin yield arrangement banks have lobbied hardest to stop.

"The bewildering thing about TradFi's extreme efforts to kill CLARITY is that they are likely accelerating their own obsolescence," Jennings wrote. He said the GENIUS Act is already law and "opened the floodgates for dollars to move onchain," and that other real-world assets will follow whether or not CLARITY passes.

Without the market-structure bill, "crypto intermediaries will keep paying yield on stablecoin deposits under GENIUS, the very outcome banks have been lobbying so hard against." CLARITY, he said, "offers TradFi a lifeline by letting institutions participate in the onchain economy, even enabling them to use permissionless DeFi." Without it, "many institutions will be sidelined."

Jennings is head of policy and general counsel for a16z crypto, which was among the firms that signed the industry letter urging Senate leaders to schedule a floor vote on the bill.

Banks Ask to Tighten Interest-Like Rewards Prohibition

After the Senate Banking Committee voted 15-9 on May 14 to advance the Digital Asset Market Clarity Act (H.R. 3633), which would divide digital-asset oversight between the SEC and CFTC, six banking trade groups — the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, Independent Community Bankers of America and National Bankers Association — said the bill should be strengthened "by tightening the prohibition on interest-like rewards for holding stablecoin."

Without guardrails, they said, "stablecoin offerings are expected to draw away bank deposits and threaten local lending and economic activity across the country."

The same six groups repeated the demand on July 22, after the Senate released an updated version of the bill. That draft "still puts at risk the local lending that drives economic activity in the U.S.," they said, adding that they appreciated senators' willingness to consider "targeted changes that would strengthen the prohibition on interest-like payments for holding stablecoins, which will siphon away the bank deposits that fuel small business, mortgage and farm loans."

Anti-DeFi Stance is Short-Sighted

Jennings attributed the banks' posture to incentives rather than analysis.

At most TradFi organizations, he wrote, "no one will get punished for defending the status quo. But if things change and anything goes wrong, heads will roll."

In replies in the same thread, he said he is "not sure they're being strategic," and that many institutions hear that "decentralized finance" removes intermediaries and, being intermediaries themselves, "default to being anti-DeFi."

Strategic institutions, he said, "realize that DeFi is a tool they can use to offer their customers cheaper and more efficient services."

The bill is still waiting for floor time. More than 200 crypto companies and lobbying groups have pressed Senate leaders to schedule a vote "without delay," while Galaxy Digital research head Alex Thorn cut his odds of 2026 passage from 75% to 60%, citing a shrinking floor calendar and unresolved ethics and illicit-finance provisions.