Banks Push Senate as Clarity Act Vote Approaches

TLDR

• Eight U.S. banking groups are urging senators to tighten stablecoin reward restrictions before the Clarity Act vote.
• Banks argue that rewards tied to stablecoin balances or holding periods could function like traditional deposit interest.
• The coalition wants Congress to close rules that still allow exchanges and intermediaries to offer stablecoin rewards.
• Banking groups also criticized the proposed deposit-flight circuit breaker, saying regulators may act too late.
• Treasury Secretary Scott Bessent defended the safeguards, saying authorities could step in if stablecoins hurt community banks.

U.S. banking groups are pressing senators to tighten rules on stablecoin rewards before the Clarity Act vote on Tuesday. Eight financial trade groups say the current draft could still allow crypto companies to offer rewards that resemble interest on bank deposits.

The coalition includes the American Bankers Association, Bank Policy Institute and Independent Community Bankers of America. The groups sent a letter to Senate Majority Leader John Thune and Democratic Leader Chuck Schumer on Monday, asking lawmakers to revise the bill before the vote.

Banks Seek Changes Before Clarity Act Vote

The banking groups argue that the bill leaves room for exchanges and other intermediaries to offer stablecoin rewards. They say those programs could encourage customers to move funds from banks into digital dollars, especially when rewards depend on balances or holding periods.

Federal law already prevents stablecoin issuers from paying yield directly. However, exchanges and other platforms can still structure rewards around stablecoin holdings. Banks want Congress to close that gap and create a clearer limit on programs that resemble deposit interest.

The coalition also criticized a proposed deposit-flight circuit breaker in the legislation. That measure would allow regulators to act if stablecoin transfers begin causing major losses of deposits at community banks.

The groups said regulators should not wait until banks have already lost large amounts of deposits. ICBA said the proposal would cover 18 months after the law takes effect and apply to community banks with less than $10 billion in assets.

Treasury Defends Current Safeguards

Treasury Secretary Scott Bessent defended the latest draft in a post on X. He said the bill gives the Treasury secretary added authority to respond if stablecoin activity begins harming community banks.

Bessent said he would use those tools if needed while supporting the Clarity Act as part of the administration’s digital-asset policy. He also pointed to the GENIUS Act as part of the government’s effort to build stablecoin infrastructure in the United States.

The crypto industry has pushed back against claims that stablecoin rewards threaten bank deposits. Industry leaders argue that banks are overstating the competitive risk as the stablecoin market continues to grow.

The Clarity Act vote now places that dispute before the Senate. Lawmakers must decide whether the final bill should further restrict rewards based on stablecoin balances and holding periods as lawmakers weigh bank and crypto industry concerns.

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