US Banking Group Criticizes Clarity's Stablecoin Deposit Protection as Inadequate

According to Eleanor Tretter, eight U.S. banking industry groups sent a letter to Senate leadership criticizing the newly added deposit withdrawal prevention mechanisms in Clarity (CLARITY), stating they lack effectiveness. The mechanism only activates after substantial deposit outflows have occurred, they argued. They urged additional strengthening of provisions to close loopholes allowing near-interest-like rewards for stablecoin balances.