- The American Bankers Association (ABA) mobilized over 8,000 letters to Senate offices seeking tighter rules on stablecoin yields ahead of a key committee vote.
- Democratic Senators Jack Reed and Tina Smith filed an amendment with language favored by banks, forcing a tough political choice on the issue.
- Senator Elizabeth Warren opposes the 309-page CLARITY Act, criticizing its lack of ethics provisions and citing massive crypto gains for the Trump family.
- The bill’s current text stems from a compromise by Senators Thom Tillis and Angela Alsobrooks that bars stablecoin issuers from paying interest.
- Nearly half of retail traders in a Stocktwits poll are optimistic the bill will pass both chambers of Congress in 2026.
The political battle over stablecoin regulation intensified this week as the Senate Banking Committee prepared for a crucial Thursday markup of the CLARITY Act. According to journalist Eleanor Terrett, the American Bankers Association (ABA) reportedly coordinated over 8,000 letters to lawmakers urging stricter yield restrictions.
Consequently, Senators Jack Reed and Tina Smith filed an amendment incorporating the banks’ preferred “economically or functionally equivalent” yield language. This move, according to reporter Brendan Pedersen, forces a difficult vote for bank-friendly Republicans. The banking lobby warns that allowing yield could cause massive deposit outflows and expand the stablecoin market to $2 trillion.
However, the current 309-page bill text already prohibits interest payments under a Tillis-Alsobrooks compromise. Banks argue this language is too narrow and, in a joint letter, seek to close loopholes for cashback-style rewards. Meanwhile, Senator Elizabeth Warren strongly opposes the legislation, stating it “stunningly includes zero provisions” to address ethics concerns.
Retail traders show cautious optimism, with 49% in a Stocktwits poll predicting the bill passes both chambers in 2026. The crypto industry, led by Coinbase and Circle, has made the act a central battleground for preserving reward programs. Committee members had until Wednesday to file amendments for the scheduled Thursday markup.
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