Banking Groups, Attorneys General Unite Against CLARITY Act Ahead of Senate Vote

As the US Senate nears a vote on the CLARITY Act on September 15, banking groups and state attorneys general are speaking out against the proposed law. The groups have expressed concerns that the bill could lead to 'deposit flight' from traditional banks to payment stablecoins with incentives.

The eight banking associations wrote a letter to Senate leaders John Thune and Charles Schumer, calling for changes to the CLARITY Act before it moves forward. They argued that a 'durable regulatory framework' is needed for the digital asset market and warned that yield offered on stablecoins could draw customers away from traditional banks.

The groups specifically targeted Section 10404 of the bill, which they claimed could create loopholes for interest payments on stablecoin balances. They also requested Congress to repeal Section 10404(3)(B), which allows rewards to be computed based on balance, duration, or tenure.

In a separate development, New York Attorney General Letitia James has joined 17 other attorneys general in opposing the bill, citing concerns that it would embolden scammers and potentially strip states of their authority to protect investors. The coalition pointed to increasing losses from cryptocurrencies, with total cryptocurrency complaints submitted to the FBI in 2025 amounting to $11.4 billion in losses, a 22% increase from 2024.