America’s Credit Unions, the American Bankers Association, and a coalition of community financial institutions have sent a joint letter to the US Senate demanding that lawmakers close a loophole in proposed digital asset legislation that could allow payment stablecoins to offer yields. The coalition argues that if stablecoins start paying interest-like rewards, the resulting deposit flight could cripple local lending across the country.
The letter, sent on January 12-13, 2026, references Treasury estimates suggesting that as much as $6.6 trillion in deposits could be at risk. That represents a massive chunk of the capital that credit unions and community banks rely on to fund home loans, small business credit, and other local financial services.
The loophole that has traditional finance sweating
The target of the coalition’s ire is the Digital Asset Market Clarity Act, designated H.R. 3633. The bill is designed to provide regulatory structure for digital assets, but the credit union lobby sees a dangerous gap in it: the legislation could permit stablecoin issuers to offer yields, rewards, or other interest-like inducements to holders of payment stablecoins.
The GENIUS Act, which was enacted in July 2025, already established some guardrails. It prohibits stablecoins from being treated as deposits and restricts their issuance by insured credit unions or banks. But the coalition argues that those protections don’t go far enough if a separate piece of legislation opens the door to yield payments through the back entrance.
