US Treasury Secretary Supports CLARITY Act, Pledges to Protect Local Banks from Stablecoin Impact

Treasury Secretary Scott Bessent has reiterated his support for the comprehensive virtual asset bill, the CLARITY Act, stating it is essential for America to win the global race in new technology. He also pledged that the Treasury will take action if local banks suffer losses due to the spread of stablecoins.

Speaking on X, Bessent stated: "I've said many times that the CLARITY Act is essential to ensuring America wins the global race for new technology." He referenced the recently passed GENIUS Act, which aims to ensure stablecoin infrastructure is built in the U.S., explaining it was enacted to secure the development of this revolutionary financial technology within American borders.

Bessent emphasized that while fostering the stablecoin industry, protecting local banks remains a priority. "Ensuring the continued prosperity of the local banking sector has been a consistent focus since day one," he said, noting that balancing technological growth with appropriate regulatory adjustments for local banks is crucial.

He highlighted provisions in the final draft of the CLARITY Act that grant the Treasury Secretary authority to take additional measures if deposit outflows negatively impact local banks. "If stablecoins cause harm to local banks, we will not hesitate to use these tools to ensure they are fully protected," Bessent stated.

The move reflects concerns from traditional banking sectors about potential large-scale capital flight as stablecoin usage grows. The Treasury has established a safety net allowing intervention if the deposit base of local banks weakens due to funds moving through stablecoins.

Bessent also underscored the importance of local banks, stating they are "essential" for U.S. economic performance and regional growth, adding that economic security is national security with local banks playing a key role in this principle.