BPI Slams Clarity Act Stablecoin Bill Over Illicit Finance Concerns

The Bank Policy Institute (BPI) has issued a statement in response to the updated Clarity Act stablecoin bill, which aims to establish a regulatory framework for digital assets. The BPI supports the establishment of such a framework but expresses concerns that the current language in the bill would still allow for interest-like payments for holding stablecoins, beyond the permitted allowance for rewards based on stablecoin transactions and activities.

The BPI argues that this would siphon bank deposits and threaten local lending and economic activity across the country. The organization also highlights AML gaps in the bill that promote pathways for illicit finance and could jeopardize U.S. national security. They recommend ensuring that all Digital Asset Service Providers and other intermediaries are subject to the same robust requirements under the Bank Secrecy Act (BSA) as banks.

The BPI's statement is echoed by a joint statement from six banking associations, including the BPI, which strongly supports establishing clear and rational rules of the road for digital assets. However, they also express concerns that the latest version of the Digital Asset Market Clarity Act released in the Senate still puts at risk the local lending that drives economic activity in the U.S.