Faryar Shirzad: The Clarity Act restricts stablecoin interest payments, banking lobby fights against regulations, and the critical role of rewards in crypto adoption | Unchained

Stablecoin regulations face banking opposition as legislative debates unfold behind closed doors, raising transparency concerns.

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Add us on Google by Editorial Team May. 8, 2026

Key takeaways

• The Clarity Act impacts the ability of stablecoins to pay interest, affecting competition between banks and the crypto industry.
• Banks are concerned that stablecoins could lead to deposit flight by mimicking traditional bank deposits.
• Rewards programs in crypto are essential for adoption and can be structured around customer activities.
• Legislation is fluid and can be revisited even after implementation.
• The administration is committed to protecting the integrity of tokenized payment legislation.
• Banking lobby groups are expected to continue opposing stablecoin regulations.
• The legislative process for stablecoins is largely happening behind closed doors, raising transparency concerns.
• The banking industry is challenging the president’s policy objectives despite benefiting from the administration.
• The rule-making process must interpret complex legislative language with congressional objectives in mind.
• Rapid stablecoin adoption could make current legislative debates obsolete.
• There are hundreds of stablecoin projects in development, highlighting the market’s rapid evolution.
• Policymakers need to be cautious not to reverse course as market practices evolve.

Guest intro

Faryar Shirzad serves as Chief Policy Officer at Coinbase, leading the company’s global engagement with policymakers on crypto regulation. He previously spent 15 years at Goldman Sachs as Global Co-Head of Government Affairs and held senior roles in the George W. Bush administration, including Deputy National Security Advisor for International Economic Affairs. Shirzad has advocated for the Clarity Act, predicting its markup in the House Financial Services Committee and passage to address regulatory clarity for digital assets.

The Clarity Act’s impact on stablecoins

• The Clarity Act introduces language that restricts how stablecoins can pay interest

  — Faryar Shirzad

• The act changes the dynamics between banks and the crypto industry by limiting interest payments.

• The core issue was a change to the Genius Act that allowed exchanges to pay rewards

  — Faryar Shirzad

• Understanding these changes is crucial for stakeholders in the crypto space.
• The act aims to prevent stablecoins from mimicking bank deposits.
• Banks argue that stablecoins could lead to deposit flight due to their similarities with bank deposits.

• Their fundamental argument was that stablecoins will cause deposit flight

  — Faryar Shirzad

• The regulatory landscape is being reshaped by these legislative changes.

The role of rewards in crypto adoption

• Rewards are a critical component for encouraging crypto adoption.

• Rewards are critical for adoption… we could live with the compromise

  — Faryar Shirzad

• Rewards can be calculated based on the duration of holding and balance.
• The structure of rewards programs is influenced by regulatory considerations.
• Understanding the regulatory environment is key to designing effective rewards programs.
• Rewards programs help bridge the gap between traditional finance and crypto.
• The flexibility in calculating rewards is important for user engagement.
• Crypto companies must navigate complex regulations to offer competitive rewards.

Legislation and its fluid nature

• Legislation is not truly finalized until it is implemented and can be revisited.

• Legislation’s never done until it’s done… people will try to revisit it

  — Faryar Shirzad

• The legislative process is inherently uncertain and subject to change.
• Stakeholders must be prepared for potential legislative revisions.
• The fluid nature of legislation poses challenges for long-term planning.
• Policymakers must balance current laws with future needs.
• The ongoing evolution of legislation requires constant monitoring.
• Understanding the legislative process is crucial for industry players.

The administration’s stance on tokenized payments

• The administration aims to protect the integrity of tokenized payment legislation.

• We’re gonna defend what the president was trying to do

  — Faryar Shirzad

• Tokenized payments are seen as a future cornerstone of the financial ecosystem.
• The US aims to lead in issuing dollar-based tokenized payments.
• Oversight of tokenized payments is a priority for the administration.
• The administration’s commitment is critical for the crypto industry’s growth.
• Tokenized payments are expected to become a predominant payment method.
• The administration’s stance influences the broader financial landscape.

Banking lobby’s opposition to stablecoin regulations

• The banking lobby is expected to continue opposing stablecoin regulations.

• The bank CEOs will probably get involved… it’s a 15 round heavyweight championship fight

  — Faryar Shirzad

• Lobby groups play a significant role in shaping regulatory outcomes.
• The ongoing battle between banks and the crypto industry is intense.
• Understanding the lobby’s influence is crucial for navigating the regulatory landscape.
• The banking industry’s resistance highlights the stakes involved.
• The outcome of this opposition will impact the future of stablecoins.
• Stakeholders must be aware of the lobby’s strategies and influence.

Transparency issues in the legislative process

• The legislative process for stablecoins is largely happening behind closed doors.

• All of this has been happening kind of behind closed doors

  — Faryar Shirzad

• Transparency concerns are significant in the stablecoin legislative process.
• The lack of transparency affects stakeholder trust and engagement.
• Understanding the legislative process is crucial for industry players.
• The closed-door nature of discussions raises accountability issues.
• Stakeholders must advocate for greater transparency in legislation.
• The current process highlights the need for more open legislative practices.

Banking industry’s challenge to the administration

• The banking industry is challenging the president’s core policy objectives.

• I can’t think of another industry that has more directly taken the president on

  — Faryar Shirzad

• Despite benefiting from the administration, banks are opposing key policies.
• This tension indicates potential future conflicts between banks and the government.
• The banking industry’s stance affects the broader regulatory environment.
• Understanding this dynamic is crucial for industry stakeholders.
• The challenge highlights the complex relationship between banks and policymakers.
• Future policy developments will be influenced by this ongoing tension.

Interpretation challenges in rule-making

• The rule-making process must interpret complex legislative language.

• The agency ultimately does… have to read it in the context of what the objectives were

  — Faryar Shirzad

• Congressional objectives play a key role in regulatory interpretation.
• Understanding these objectives is crucial for effective rule-making.
• The complexity of language poses challenges for regulators.
• Stakeholders must be aware of the intricacies involved in rule-making.
• The interpretation process affects the implementation of stablecoin regulations.
• Effective rule-making requires balancing legislative intent with practical considerations.

Rapid adoption of stablecoins and legislative debates

• The rapid adoption of stablecoins could render current legislative debates outdated.

• There’s something on the order of five hundred and fifty to 200 separate stablecoin projects

  — Faryar Shirzad

• The fast-paced evolution of the stablecoin market challenges legislative efforts.
• Policymakers must adapt to the rapid changes in the market.
• The disconnect between legislation and market practices is significant.
• Understanding the current landscape is crucial for effective policy-making.
• The number of stablecoin projects highlights the market’s growth.
• Stakeholders must be prepared for the implications of rapid adoption.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.