Banking groups warn the Clarity Act may accelerate deposit flight into stablecoins unless yield limits are tightened.
The American Bankers Association intensified lobbying efforts ahead of a Senate Banking Committee vote on the Clarity Act, arguing that yield-bearing stablecoins could divert deposits from traditional banks. The group warned that without stricter yield limits, stablecoins may undermine financial stability by reducing funding for mortgages and business loans.
Banking trade groups contend that stablecoins offering yields could act as substitutes for insured deposits, while crypto and fintech firms argue they enable faster payments and digital liquidity. The dispute has already delayed progress on broader crypto legislation, including the GENIUS Act, as lawmakers prepare for a markup this week.
The ABA urged bank executives nationwide to contact senators, pushing for tighter restrictions on payment stablecoins in the bill’s final language.