ICBA and state and national banking associations urged senators to strengthen the Clarity Act’s prohibition on stablecoin interest, yield, and rewards to preserve local lending.
Details: In a joint letter to senators, the groups made several key points:
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Congress's clearly stated intent is that payment stablecoins serve as transactional tools rather than store-of-value products.
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Section 10404 of the Clarity Act does not provide sufficient certainty to distinguish payment stablecoins from “store-of-value” products and substitutes for bank deposits.
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Without amendment, this ambiguity could result in a flight of deposits to stablecoins with real-world consequences.
Illustrated Effect: An ICBA economic data analysis shows that failing to extend the prohibition on stablecoin yield via the Clarity Act could reduce community bank lending by $850 billion, while an ICBA interactive map details how stablecoin growth could put small-business credit at risk.
Vote Next Week: With the Senate scheduled to hold a procedural vote on the Clarity Act on Tuesday, ICBA is calling on community bankers to contact their senators and urge them to strengthen the bill’s prohibition on stablecoin yield.