U.S. banking groups have urged the Senate to tighten the CLARITY Act’s stablecoin yield rules, warning that unclear language could encourage payment stablecoins to compete with traditional bank deposits. According to a joint letter sent to Senate Majority Leader John Thune and Minority Leader Charles Schumer, the American Bankers Association (ABA), the Independent Community Bankers of America (ICBA), and 76 state banking associations asked lawmakers to revise Section 404 of the Digital Asset Market Clarity Act. The banking groups said the current wording does not provide enough certainty to prevent payment stablecoins from offering incentives that resemble interest on deposits.
Regulatory Concerns
The organisations warned that allowing stablecoin issuers to offer yield-like incentives could reduce deposits that local lenders rely on to fund activities such as mortgage lending and small business financing. The groups urged senators to strengthen the prohibition on interest-like rewards and remove language they believe creates uncertainty around incentives linked to stablecoin balances.
Ongoing Negotiations
The latest request adds another unresolved issue as senators continue negotiating the market structure bill before the chamber’s scheduled August recess. Other organisations, including the Federal Law Enforcement Officers Association (FLEOA), have also continued pressing lawmakers for changes to different parts of the legislation.
Next Steps
The CLARITY Act is now on the Senate calendar awaiting floor consideration, and if approved, the House must also approve the final version before it can be sent to the President for signature
Based on reporting from crypto.news.
