Banking Giants Fight Back: US Banks Demand Amendments to CLARITY Act Stablecoin Rules

A massive coalition of US banking heavyweights, led by the ABA and ICBA, is officially pushing back against the CLARITY Act's current stablecoin yield provisions. In a joint letter to Senate leaders, these institutions warned that the bill's ambiguous language regarding interest and rewards could allow stablecoins to function as illegal deposit substitutes.

The industry's goal is to ensure that payment stablecoins remain strictly transaction tools rather than evolving into store-of-value products. This regulatory tug-of-war highlights the growing tension between traditional finance and the digital asset market as lawmakers prepare for critical House hearings.

The American Bankers Association (ABA), the Independent Community Bankers of America (ICBA), and 76 other state banking associations have issued a joint letter calling for urgent amendments to the Digital Asset Market Clarity Act (CLARITY). The group argues that the current provisions regarding stablecoin interest, yield, and rewards are too vague and pose a systemic risk.

According to the press release, the ABA is concerned that these ambiguities could encourage stablecoin arrangements to effectively function as substitutes for traditional bank deposits. This contradicts Congress's longstanding intent that payment stablecoins should serve as transaction tools rather than store-of-value products. The industry is seeking clarity ahead of the bill's House hearing on July 17.