Authored by Brayden Lindrea via CoinTelegraph,.com,
America’s largest banking groups said they remain dissatisfied with the CLARITY Act’s newly proposed language on stablecoin yield, arguing that it fails to protect bank deposits.
In a statement Monday, the bankersacknowledgedthat US Senators Thom Tillis and Angela Alsobrooks are“seeking to achieve the correct policy goal” in prohibiting stablecoin yield but noted that the CLARITY Act’s “proposed language” currently “falls short of that goal.”
“It is imperative that Congress get this right,”the American Bankers Association said in a joint statement with the Bank Policy Institute, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America.
The dispute between bankers and the crypto industry over stablecoin yield has stalled the bipartisan bill, which passed the House of Representatives in July by a 294-134 vote.
There are concerns that the CLARITY Act may not pass before the US midterm elections in November 2026, which could further hinder its progress.
Banking groups have previously cited studies suggesting that widespread stablecoin adoption could lead to trillions in outflows from the US banking system, particularly from community banks, which may not have enough balance-sheet flexibility toabsorb these outflowswithout resorting to higher-cost wholesale borrowing.
In the Monday statement, the bankers also cited an article by Stanford-trained economist Andrew Nigrinis to argue that stablecoin yields driving bank deposit outflows “could reduce all consumer, small-business, and farm loans by one-fifth or more, making it essential for the prohibition to be clear and transparent.”
However, White House economists reported in April thatbanning stablecoin yieldmay increase bank lending by only $2.1 billion, a marginal net increase of about 0.02%.
The bankers contested the language of Section 404, arguing that it allows crypto platforms to pay users bank-like interest or yield outside traditional rules.
Source: ZeroHedge News
