WASHINGTON, D.C. – A coalition of financial trade associations representing banks of all sizes today urged Senate Banking Committee leaders to make important technical refinements to proposed payment stablecoin yield language in the CLARITY Act, warning that current provisions could accelerate deposit flight from the banking system.
In a letter sent to Chairman Tim Scott (R-S.C.) and Ranking Member Elizabeth Warren (D-Mass.), the groups—including the American Bankers Association, the Independent Community Bankers of America, and the Bank Policy Institute—argued that the bill's current stablecoin yield provisions lack adequate guardrails. They said unregulated yield-bearing stablecoins could draw deposits away from traditional banks, destabilizing the financial system.
The CLARITY Act, introduced in March 2025, aims to create a federal regulatory framework for payment stablecoins. The banking groups specifically requested that the legislation require stablecoin issuers to maintain 100% reserve backing and limit the ability to offer yields that could compete with bank deposits. They also called for clearer definitions of what constitutes a 'payment stablecoin' versus an investment product.
Senate Banking Committee staff have indicated they are reviewing the letter and considering amendments. The committee is expected to mark up the bill later this month. The banking groups emphasized they support the overall goal of stablecoin regulation but want to ensure it does not undermine the traditional banking sector.
