Senate Clarity Act Revised Amid Stablecoin Concerns

Senate Republicans have revised the Clarity Act to protect banks and credit unions from losing deposits to stablecoins. The legislation aims to address the risk of deposit flight tied to payment stablecoins, but the banking industry remains concerned about language permitting crypto companies to offer rewards on stablecoins.

The revised bill gives the Treasury secretary new authority to address the risk of deposit flight. However, banking groups have warned that stablecoins offering incentives comparable to deposits or other savings products could pull money from federally insured financial institutions and reduce their ability to make loans.

Jason Stverak, Chief Advocacy Officer at the Defense Credit Union Council, emphasized the need for credit unions to be treated equally under the proposed safeguard. He noted that the legislation explicitly recognizes bank deposits but does not provide an equivalent trigger for losses of credit union share accounts.