US Banks Push Back Against CLARITY Act Over Stablecoin Yield Concerns

The US banking industry is sounding the alarm over the CLARITY Act, citing concerns that its language on stablecoin yields does not provide sufficient protection for ordinary bank deposits.

At issue is Section 404 of the bill, which deals with stablecoin-related yields. According to the banks, this provision falls short of prohibiting stablecoin rewards in ways that could undermine traditional banking funding models.

The American Bankers Association and several other industry groups have come together to express their concerns, warning that any loopholes could enable platforms to offer bank-like interest on crypto balances outside established regulations. This, they argue, would threaten the stability of the banking system and the safety of deposits.