American Bankers Association Backs Clarity Act, Seeks Tighter Curbs on Stablecoin Rewards

The American Bankers Association has backed the Clarity Act, legislation aimed at establishing a regulatory framework for the cryptocurrency market, with President and CEO Rob Nichols stating the group's goal is to strengthen the bill rather than block its passage. Nichols argued that rewards paid to stablecoin holders could effectively function like interest on bank deposits, noting that while the Genius Act prohibits stablecoin issuers from paying interest or yield, a dispute remains over whether crypto exchanges or affiliated companies could offer similar interest-like rewards. The ABA warns that stablecoins could drain banks' deposit base if they attract funds with higher rewards.