Banks Push for Tighter Stablecoin Rules Amid CLARITY Act Debate
The banking industry has sent a letter to Senate leaders urging them to revise the CLARITY Act's provisions on stablecoins, specifically Section 10404, which restricts interest or yield on payment stablecoins. The letter, signed by 134 banking executives and leaders, argues that stablecoin rewards based on balance size or holding duration could pull funds away from bank deposits.
The signatories include leaders tied to Bank of America, U.S. Bank, Zions Bank, First Hawaiian Bank, Bank of Hawaii, Hancock Whitney Bank, FNBO, Eastern Bank, Lake City Bank, and Univest Financial Corporation.
Patrick Witt, a White House crypto adviser, responded by pointing out what he described as a contradiction in the banking sector's position: 'Banks: We must ban the payment of interest on stablecoins to protect community bank lending!' and 'Clarity Act: Bans payment of interest on stablecoins.'