ABA, state banking groups push back on CLARITY Act stablecoin yield provisions

ABA and state banking associations published a joint letter calling for more detail on the CLARITY Act’s stablecoin yield provisions, ahead of the bill’s House hearing on Friday.

A wide swath of the US banking industry is urging Senate leaders to amend the stablecoin yield provisions of the Digital Asset Market Clarity Act (CLARITY) now under consideration. 

The American Bankers Association (ABA), the Independent Community Bankers of America (ICBA) and 76 other state banking associations sent a joint letter to Senate leaders that claimed that the current language on stablecoin interest, yield and rewards is too ambiguous and argued that new amendments need to prevent payment stablecoins from acting as deposit substitutes rather than pure transaction tools.

The joint letter, which showed support for the broader bill, said the ABA is concerned that ambiguities within the bill “could encourage stablecoin arrangements to effectively function as substitutes for deposits, despite Congress’ longstanding and clearly stated intent that payment stablecoins should serve as transaction tools rather than store-of-value products,” according to a press release published on Monday.

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