US Banking Lobby Seeks Ban on Stablecoin Rewards Programs

Nearly every state banking association in the US has joined forces to urge Senate leaders to ban balance-based stablecoin rewards programs. The coalition, backed by the American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA), sent a letter on September 10 to request amendments to the CLARITY Act.

The target is Coinbase's USDC rewards program, which pays users for holding the dollar-pegged stablecoin. The banking lobby claims that such incentives blur the line between crypto and traditional finance, threatening community banking.

The coalition wants Section 10404(c)(1) amended and subsection 10404(3)(B) deleted from the CLARITY Act. This would effectively ban rewards tied to stablecoin balances or holding duration.