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Citigroup CEO Jane Fraser isn’t trying to kill the Digital Asset Market Clarity Act. She’s trying to perform surgery on it before it becomes law.
In a Fox Business interview, Fraser laid out her case for why the CLARITY Act, which passed the Senate Banking Committee in May 2026 with a bipartisan 15-9 vote, needs targeted revisions before reaching the finish line. Her primary concern: provisions that would allow rewards linked to stablecoin transactions could quietly drain deposits from traditional banks, weakening their ability to lend.
The deposit drain problem
Fraser’s argument isn’t that stablecoins are bad or that digital assets should be stifled. It’s that the specific reward mechanisms written into the current version of the CLARITY Act could create an uneven playing field. Traditional banks face strict reserve requirements and regulatory oversight on every deposit they hold. Stablecoin issuers offering comparable yield-like products might not face the same constraints, at least not yet.
That asymmetry is what Fraser wants Congress to fix. She described the passage of a properly refined version of the CLARITY Act as a “very positive outcome for the entire system.”
What the CLARITY Act actually does
The Digital Asset Market Clarity Act aims to establish clearer regulatory boundaries for digital asset markets in the US. It’s designed to answer the questions that have plagued the industry for years: which assets are securities, which are commodities, and who regulates what.
The stablecoin provisions that Fraser is targeting represent one piece of a much larger legislative framework. But they’ve become a flashpoint because they sit at the intersection of traditional banking and digital finance.
Fraser’s position is notable for its restraint. She hasn’t called for the bill to be scrapped. Instead, she’s publicly acknowledging that digital asset regulation is necessary and overdue, while simultaneously pushing for amendments that protect the banking sector’s core business model.
Why banks are paying closer attention now
Fraser’s comments reflect a banking sector that has accepted digital assets aren’t going away and is now focused on shaping the rules rather than fighting the game. The fact that she stated they “have not given up on improving the bill” implies ongoing conversations with lawmakers.
The competitive dynamics she’s highlighting also point to a broader tension in financial regulation. Banks have spent decades operating under frameworks like Basel capital requirements, Dodd-Frank stress tests, and FDIC deposit insurance mandates. If new digital asset entities can offer similar services without similar regulatory costs, the playing field tilts.
What comes next
For the digital asset industry, the CLARITY Act’s progress is broadly positive. Regulatory clarity has been the single most requested item from institutional players, exchanges, and token issuers for years.
But the banking lobby’s push for amendments could slow the bill’s timeline or alter its final shape in ways that affect how stablecoin issuers operate. If reward mechanisms get curtailed or subjected to banking-equivalent regulations, it could limit one of the key competitive advantages that stablecoin platforms have been building toward.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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