Banking Associations Jointly Urge Tightening of Clarity Act Stablecoin Provisions
The American Bankers Association, Independent Community Bankers of America, and 76 state banking associations have jointly written to Senate leadership, urging for stronger provisions related to stablecoin earnings in the Clarity Act.
They believe the current wording is ambiguous and could allow stablecoin arrangements to effectively serve as substitutes for bank deposits, contrary to Congress's long-term intention of positioning payment stablecoins as transaction tools rather than value storage products.
From a market mechanism perspective, the traditional banking system, as the primary provider of deposits and credit, faces the risk of deposit outflows, with funds potentially shifting to stablecoins in search of similar yields, which could pressure banks' lending capacity. Meanwhile, crypto issuers and payment platforms benefit from a looser environment, necessitating the Senate to balance innovation with deposit protection in light of these events.
Source: Public Information
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The American Bankers Association has long advocated for the zero-interest provisions on stablecoins in the GENIUS Act and Clarity Act, having continuously pressured for further tightening after the Senate Banking Committee advanced the bill in May 2026 to prevent deposit substitution.
On the capital front, banking lobbying groups mobilized state association resources through a joint letter to exert concentrated pressure on Senate Majority Leader Thune and Minority Leader Schumer, aiming to strengthen the language prohibiting earnings on payment stablecoins, protecting the traditional deposit base and maintaining lending capacity.
Similar to previous lobbying cases by the banking industry against stablecoin projects like Libra, the current Clarity Act is at a critical amendment stage before Senate floor debate, with traditional financial forces attempting to solidify control over payment infrastructure.
Essentially, this represents a transfer of pricing power amid regulatory changes, as banks emphasize the chain reaction of deposit outflows on credit to the real economy, pushing for tighter provisions to prevent stablecoins from evolving from transaction mediums to deposit-like products, thereby maintaining banks' core position in financial intermediation.
ABAB News · Cognitive Law
- Deposit outflows are not a technical issue, but an inevitable result of regulatory ambiguity.
- The stricter the earnings ban, the longer traditional banks retain pricing power.
- The boundaries of innovation are determined by the battle for deposit protection, not by the technology itself.