Fraser Backs Clarity Act Passage, Warns on Stablecoin Yield Provision
Citigroup CEO Jane Fraser has expressed her support for the passage of the Clarity Act, which is currently awaiting a procedural vote in the Senate. According to The Block, Fraser stated that she had not given up on efforts to improve the bill and hopes a strong version will become law. She described the passage of the legislation as 'very positive' for the broader system.
However, Fraser raised concerns about a provision in the Clarity Act that would allow some forms of stablecoin yield. Specifically, she noted that this provision could affect bank deposits, potentially leading to money leaving banks and weakening their ability to provide loans and credit. This is because if deposits develop yield-like structures, it may encourage customers to keep their funds outside of traditional banking systems.
The Clarity Act has been a subject of debate in the banking industry, with some notable figures taking strong positions on the measure. JPMorgan Chase CEO Jamie Dimon has criticized the bill and attacked Coinbase CEO Brian Armstrong. Meanwhile, Summer Mersinger, chief executive officer of the Blockchain Association, warned that the yield provision could become a flashpoint again if the Clarity Act passes the Senate and returns to the House.