Can the stablecoin bill get passed before the Republicans lose Congress?
Hello and welcome to Regulator, the newsletter for Verge subscribers that goes into tech shenanigans that take place in the backrooms of Washington. Really, it sometimes does feel like the online series The Backrooms: a parallel universe with no internal logic, evil corporations lurking in the background, and mind-rending eldritch horrors around every corner. (Not a subscriber yet? Sign up here today. Have any tips about mind-rending eldritch horrors lurking in DC? Send that intel to me at tina.nguyen+tips@theverge.com.)
Speaking of liminal spaces and endless hallways that drive their inhabitants insane: Today, we’re going to Capitol Hill, where the Senate is, at long last, finally revisiting the crypto market structure bill known as the Clarity Act. And it is, indeed, driving everyone insane.
On Sunday, as the crypto industry was about to take victory laps for getting the Clarity Act back to the Senate, the American Bankers Association, one of the largest financial industry interest groups in the country, sent out an email that immediately ruined their Mother’s Day. Apologizing to all the moms he’d messaged, Rob Nichols, the president and CEO of the ABA, begged the CEOs on the email, from Wall Street to local community banks, to drop everything and start contacting their Senators ASAP — “Please encourage your employees to do the same” — because the Clarity Act posed an existential threat to their industry. “The current version of the legislation, although improved from an earlier version, still does not adequately prevent crypto companies from offering interest-like rewards on payment stablecoins,” wrote Nichols, warning that if the “loophole” was not closed, customers would be incentivized to move their cash holdings into stablecoins, leading to a bank deposit flight that would severely undermine banks.
