American Bankers Association President and CEO Rob Nichols sent an urgent letter to bank CEOs across the country yesterday, May 10, warning that the current version of the CLARITY Act does not adequately prevent crypto companies from offering interest-like rewards on payment stablecoins.
Nichols argued in the letter that the gap could incentivize deposit flight from traditional banks and put economic growth and financial stability at risk and urged bank leaders to immediately contact their senators and push for tighter restrictions before Thursday's vote.
The letter came days after Senate Banking Committee Chairman Tim Scott announced that the committee would hold an executive session on Thursday, May 14 at 10:30 a.m. to mark up the Digital Asset Market Clarity Act, as Reuters reported. The sweeping legislation would establish a comprehensive federal framework for digital assets, dividing regulatory jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Comission.
The sticking point, as it has been for months, is stablecoin yield. As The Defiant reported, the latest draft — negotiated by Senators Thom Tillis and Angela Alsobrooks — bans yield on passive stablecoin balances but permits activity-based rewards, a distinction the banking lobby says is still too permissive.
