- The American Bankers Association and 77 other banking groups sent a joint letter urging Senate leaders to amend stablecoin yield provisions in the CLARITY Act.
- The groups argue the current language on stablecoin interest is too ambiguous and could allow stablecoins to function as deposit substitutes, risking deposit flight.
- Galaxy Digital cut its odds of the CLARITY Act becoming law in 2026 to 50%, citing a narrowing legislative window before the Senate recess.
A coalition of 78 banking associations, led by the American Bankers Association and the Independent Community Bankers of America, sent a joint letter to Senate leaders urging amendments to the stablecoin yield provisions of the Digital Asset Market Clarity Act (CLARITY Act). The groups claim the current language on stablecoin interest, yield, and rewards is too ambiguous and could allow stablecoins to effectively function as deposit substitutes rather than pure transaction tools, according to the joint letter.
The banking organizations expressed support for the broader bill but warned that ambiguities could encourage stablecoin arrangements to circumvent Congress’s intent that payment stablecoins serve as transaction tools, not store‑of‑value products. They urged lawmakers to revise section 404 to clarify the prohibition on interest and yield, ensuring that the prohibition cannot be circumvented through alternative incentive structures.
Consequently, the pushback reinforces Galaxy Digital’s prediction that the Senate is running out of time to pass the bill before the end of the year. Galaxy Digital cut its odds of the CLARITY Act becoming law in 2026 to 50% on June 26, citing a lack of unified Senate Banking‑Agriculture text and a narrowing legislative window before lawmakers leave Washington.
Meanwhile, the CLARITY Act has secured its second public endorsement from a major U.S. law enforcement organization, the Federal Law Enforcement Officers Association, on July 10. At the beginning of June, more than 200 crypto companies and related organizations urged the Senate to pass the act in a letter shared by crypto lobby group Stand With Crypto.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- Grok AI Uploads Full Git Repos, Not Just Code Files
- BRICS expands to 10 members, challenges US dollar dominance by 2050
- Cathie Wood Boosts Nuclear Stakes: Buys OKLO, XE Shares
- White House crypto pointman Patrick Witt takes leave for JAG training
- BSC Volume Bot Review: What Chain-Specific Quality Looks Like
