Goldman Sachs breaks with banking lobby group over CLARITY bill

Goldman Sachs CEO Solomon supports the CLARITY Act, although seven Senate Democrats oppose the latest draft and banking groups have also objected to the stablecoin reward rules.

Summary

David Solomon supports advancing the CLARITY Act despite concerns expressed by banking groups about stablecoin rewards. Seven Senate Democrats opposed the latest draft over ethics and consumer protection provisions. Republicans still need to fight for Democratic votes to reach the 60-vote threshold required by the Senate.

It is reported that Solomon expressed "strong support" for advancing the bill, believing that the United States should use it to establish a cryptocurrency market structure and promote the development of digital assets. Although he admitted that the proposal was not perfect and there was still room for discussion, the Goldman Sachs boss believes adopting a framework is more important than resolving all differences first. Solomon told the media that the bill could create a level playing field, enhance market stability, and allow the digital asset market to develop under clearer rules. His comments brought the head of one of Wall Street's largest banks together with cryptocurrency executives who are urging Congress to complete the bill, even as banking trade groups try to tighten restrictions on stablecoin rewards.

These remarks distinguish Goldman Sachs 'public stance from the Banking Association's campaign against the current draft. Solomon did not directly support the incentive provisions, but his support for pushing the bill as a whole contrasts with groups that warned the text could siphon away deposits from traditional bank depositors.

Stable currency incentives cause banks to continue to oppose

According to the latest Republican draft, cryptocurrency companies can provide rewards related to customer activities, but prohibit the payment of interest on stablecoins in idle balances. Banking associations believe that this distinction allows cryptocurrency platforms to compete for deposits through incentives, leading to the potential for funds to flow out of community banks. In a letter to Senate Banking Committee leaders in May, multiple banking and trade groups called for stronger safeguards against loss of deposits. These groups argue that the flow of money from banks to stablecoin products may reduce the credit available to households and businesses, especially in communities that rely on small lending institutions.

JPMorgan Chase CEO Jamie Dimon also criticized the bill, adding another prominent Wall Street figure to the industry's opposition. So Salomon's support does not mean that there is consensus in the banking community; it suggests that there is disagreement among top executives over whether the award terms should block passage of the bill.

Earlier this week, the Hispanic Chamber of Commerce sent a letter to Senate leaders supporting banking concerns. The chamber warned that the loss of deposits could harm small business loans, community development and economic opportunities for Hispanic communities. The Chamber of Commerce also cited analysis saying that net outflows related to cryptocurrency activities in community banks do exist.

Despite a compromise reached earlier in 2026, concerns within the Republican Party have resurfaced. Senators John Curtis and John Cornyn reportedly expressed concerns about the loss of deposits, while Sen. Tom Tillis opposed to the current ethics clause. Their opposition has put internal pressure on the party leadership, which is fighting for enough votes to pass the bill.

Democratic resistance prevented a smooth vote

Seven Democratic senators-Catherine Cortez Masto, Angela Assobrooks, Cory Booker, Ruben Gallego, John Hickenlooper, Mark Warner and Raphael Warnock-have rejected the latest text, but the door to negotiations remains open. In a joint statement, they said provisions covering ethics, consumer protection, illicit finance, conflicts of interest and market integrity still needed further revision.

Elizabeth Warren, a senior member of the Senate Banking Committee, also criticized the draft, arguing that its ethics provisions failed to adequately address President Donald Trump's cryptocurrency business interests. Warren also maintains that the bill lacks adequate investor and national security protections. After Democrats made the ethics clause a condition for continued negotiations, Republicans increased restrictions on the cryptocurrency activities of senior elected officials. Trump accepted the clause earlier this week, but the agreement, which handed enforcement power to the Justice Department, did not address Democratic concerns. Assobrooks reportedly opposed enforcement by the Justice Department alone and called the arrangement "not serious." She said she would vote against the text if it was submitted to the Senate for a vote without changes. Because she was one of two Democrats who helped pass the bill through the Senate Banking Committee in May, her position carries greater weight.

Democratic resistance has reportedly dropped the bill's probability of passage in 2026 by 15 percentage points from its July 21 peak. Republicans need Democratic support to meet the Senate's 60-vote threshold, which has left Solomon, Ripple CEO Brad Garlinhouse and Coinbase CEO Brian Armstrong urging lawmakers to take action before the August recess. Galinghouse backed a similar view by Ripple's chief legal officer Stewart Aldrotti on July 22. Aldrotti described the CLARITY Act as a consumer protection measure that would strengthen anti-money laundering and customer verification rules while providing law enforcement and state authorities with clearer tools to combat misconduct.

With votes still short, Goldman's support added another strong supporter to the bill, but did not resolve any of the disputes that had prevented the Senate from reaching a deal.