US Bank Groups Urge Strengthening Stablecoin Reward Restrictions in Clarity Act

Eight U.S. bank associations have urged strengthening the stablecoin reward restrictions in the Clarity Act, citing concerns that existing exemptions permit interest-like payments that could drain bank deposits. Decrypt reported on May 15 that the American Bankers Association (ABA), Bank Policy Institute (BPI), and Independent Community Bankers Association (ICBA) sent a letter to Senate Republican Leader John Thune and Democratic Leader Chuck Schumer.

The banking groups requested removing the word 'solely' from payment restriction clauses related to stablecoin holdings. They also asked to replace the economic and functional equivalence standard for rewards and interest with a more stringent 'substantially similar' benchmark, while deleting language allowing rewards to vary based on customers' stablecoin balances, holding periods, or duration of holdings.