Banks' Backlash Against Stablecoin Ban Puzzles White House Crypto Adviser
White House crypto adviser Patrick Witt expressed frustration on X over banks' resistance to the CLARITY Act, which includes a stablecoin yield ban that they initially demanded.
The American Bankers Association spent months pushing for this ban to protect community bank deposits. However, after the CLARITY Act was introduced, they suddenly argued that it would destroy community bank lending and must be stopped.
American Bankers Association president Rob Nichols claimed that the current bill leaves a gap, allowing stablecoin issuers to route yield payments through affiliates and exchanges rather than paying them directly. He suggested that fixing this issue requires only two paragraphs of edits to the 600-page bill.
The Senate Majority Leader John Thune acknowledged that the path forward for the CLARITY Act is uncertain due to the lack of Democratic support, with a practical deadline looming at the end of this week.