House Financial Services Committee member French Hill told Fox News that traditional banks do not need to issue stablecoins to compete in blockchain payments - tokenized deposits do the same job while keeping funds inside the regulated banking system.
Key Takeaways
Tokenized deposits settle 24/7 on blockchain without leaving regulated banking.
Both Wall Street giants and community banks oppose stablecoin yield payments.
The Treasury regulatory process may resolve bank vs. non-bank sales practice disputes.
The CLARITY Act still needs Senate floor amendments before any vote.
French Hill has one firm position on stablecoins: they should not pay interest. “In the House, we said that stablecoins would not pay interest, and that’s still my position,” he told in an interview for Fox News, shared by Bitcoin Magazine. “It’s a payment token.”
The distinction matters because a yield-bearing stablecoin starts to look like a bank deposit or money market fund, products that carry federal regulatory obligations crypto-native issuers do not currently meet. Letting non-bank issuers pay interest on stablecoin holdings would undercut banks that hold reserves, comply with lending rules, and answer to federal regulators.
The CLARITY Act’s current draft still contains a carve-out that allows yield payments in certain program membership contexts. Hill flagged that JPMorgan CEO Jamie Dimon remains specifically concerned about it. “What I think Jamie is upset about is he says that even though the language says that the crypto companies will not be able to pay rewards, there are some times if you’re a member of a program that they will be able to pay the reward,” the congressman said.
JUST IN: ?? Congressman French Hill on the Clarity Act: "We need this bill. We need market structure. And I believe the banks will be extremely competitive in this industry." ? pic.twitter.com/YpMdR1MxjM
— Bitcoin Magazine (@BitcoinMagazine) June 5, 2026
Banks Are Already Building the Alternative
While Congress debates, the major banks have moved. Hill pointed to the Wall Street tokenized deposit network announced this week as proof that traditional banking infrastructure does not need private stablecoins to operate on blockchain rails.
“The banks talked about tokenizing just this week, and they are launching this network that will launch next year, operated under a company called The Clearing House,” he said on Fox News. “It allows tokenized deposits to move immediately across blockchain technology with 24/7 settlements.”
The practical implication is direct: tokenized deposits give corporate treasuries instant, programmable, 24/7 dollar settlement, the same features that make private stablecoins attractive, without the funds ever leaving a federally insured bank account. “The technology to tokenize deposits allows one to not even depend on a dollar-backed stablecoin here in a US-type application,” Hill said.
Community Banks Back the Same Position
The opposition to stablecoin yield is not confined to Wall Street. The Independent Community Bankers of America has aligned publicly with JPMorgan and Citigroup on the issue. Hill cited the ICBA president’s statement on air: “Our analysis shows that Congress must extend the prohibition on payments of yield and interest on payments, stablecoin holdings to crypto exchanges, affiliates and other intermediaries. The role community banks serve is too important to risk.”
Where the CLARITY Act Stands
The bill is not ready for a Senate floor vote. Banks are still pushing for changes to the Tillis-Alsabrooks compromise language, and both sides are still negotiating. “We’ll just have to work and see how it can be made better there,” Hill said.
He suggested the Treasury Department’s regulatory process could handle remaining disputes between bank and non-bank issuers on sales practices without requiring additional statutory language. The overall framing was direct: “We need this bill. We need market structure. And I believe the banks, as you just noted, will be extremely competitive in this industry. I just don’t have any doubt about that.”
