Citigroup CEO Backs Clarity Act Legislation Despite Stablecoin Yield Debates

Citigroup CEO Jane Fraser has expressed her support for the CLARITY Act legislation, which aims to create a clearer regulatory framework for digital assets. Speaking on Fox Business, she noted that while refinements are still needed, moving forward with a well-crafted bill is desirable.

The Digital Asset Market Clarity Act seeks to establish standards for market participants and reduce uncertainty that has complicated institutional involvement in the sector. It would also delineate responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Fraser acknowledged ongoing reservations, particularly around provisions governing rewards or yields linked to stablecoins. Some banks have raised concerns that certain incentive structures could encourage customers to shift funds out of traditional deposits, potentially limiting resources available for lending.

A compromise developed by Senators Angela Alsobrooks (D-Md.) and Thom Tillis (R-N.C.) attempts to navigate this point of contention. The adjusted language would prohibit platforms from offering rewards simply for holding stablecoins, while incentives connected to transactions or payments could still be permitted.