Image Credit: Shutterstock
Eight U.S. banking trade groups are urging Senate leaders to tighten restrictions on stablecoin rewards and interest-like payments in the revised CLARITY Act. The groups argue the current language could still permit incentives tied to stablecoin holdings that they view as economically similar to bank deposit interest.
Banking Groups Target Stablecoin Reward Rules
The Sept. 14 letter was signed by the American Bankers Association, Bank Policy Institute, Consumer Bankers Association and five other banking groups.
The coalition supports distinguishing transaction-based rewards from payments that resemble interest for holding stablecoins. However, it argues the current wording could allow crypto platforms and other covered companies to structure rewards around stablecoin balances without triggering the prohibition.
The groups said:
“Congress should address this risk upfront by ensuring the Clarity Act prohibits payment stablecoin rewards and incentives that function like deposit interest.”
Groups Seek Changes to Section 10404
The letter proposes changes to Section 10404 of the latest bill. The groups want lawmakers to remove the word “solely” from language restricting interest or yield connected with holding payment stablecoins.
They also want an “economically or functionally equivalent” test replaced with a broader “substantially similar” standard. The groups additionally oppose language allowing permitted rewards to be calculated using a customer’s balance, holding duration or tenure.
Their concerns remain advocacy positions. The letter does not establish that stablecoin rewards have already caused the deposit losses the groups warn could occur.
Senate Discussion Draft Includes Deposit-Flight Mechanism
The latest Senate discussion draft includes a mechanism aimed at addressing concerns about deposit outflows. Within 18 months of enactment, the Treasury secretary would determine whether stablecoin-related movements caused a “substantial detrimental impact” on deposits at community banks with less than $10 billion in assets.
If Treasury makes that finding, banking regulators would be required to develop rules. The trade groups oppose relying on that approach because they argue intervention could come only after significant outflows had already occurred. The dispute builds on the GENIUS Act, enacted in 2025, which prohibits permitted payment stablecoin issuers from paying interest or yield solely for holding, using or retaining a payment stablecoin.
Senate Vote Brings Dispute Into Focus
The stablecoin provisions are among several contested parts of the Senate’s revised digital-asset market-structure package.
The Senate is scheduled to vote on Sept. 15 on cloture for the motion to proceed to H.R. 3633. Invoking cloture on the motion to proceed generally requires 60 votes and would not amount to final passage of the bill.
