Appearing before the Senate Banking Committee, Treasury Secretary Scott Bessent acknowledged concerns about crypto entities paying interest or yield on payment stablecoin holdings and said Treasury is working to ensure there would be no deposit volatility associated with it.
Details: While delivering the Financial Stability Oversight Council’s annual report to the committee, Bessent said he’s been a champion of community banks and wants to avoid any deposit volatility resulting digital assets market structure legislation.
ICBA Advocacy: ICBA continues working with policymakers to ensure the Senate Banking Committee's CLARITY Act explicitly bars crypto exchanges, affiliates, and other intermediaries from paying interest, yield, or rewards on payment stablecoin holdings. ICBA and other groups this week met with administration officials at the White House to discuss the issue.
Data on Deposit Impact: A recently released ICBA data analysis shows allowing crypto intermediaries to pay interest or yield on payment stablecoin holdings could reduce community bank lending by $850 billion due to a $1.3 trillion reduction in the industry’s deposits.