Discussions on the Digital Asset Market Clarity Act (Clarity Act) in the US Senate resonated in the financial sector. The American Bankers Association (ABA) is conducting an extensive lobbying effort against the stablecoin articles in the updated version of the law ahead of the Banking Committee vote on Thursday. ABA, one of the leading professional organizations in the banking industry, warned in its message to bankers and employees in the country that stablecoin projects developed for payment in the draft law could put traditional bank deposits at risk. The institution argued that the regulation still allows stablecoins with yields that could lead to the withdrawal of customers’ funds from banks.
Bankers are pressing with an active lobby
In a call sent to bank executives and employees across the country over the weekend, the ABA urged members of the Senate to press for stricter regulations against stablecoins. Despite the union’s years of negotiations and requests for change, it was stated that the new regulation still does not prevent crypto companies from offering interest-like rewards to consumers.
The Senate Banking Committee is expected to announce the updated text of the draft law on Monday, and new comments and changes will come from MPs on Tuesday. The commission vote is planned for Thursday.
“We are waiting for your support to make our voices heard before senators put this bill on the agenda,” said ABA President Rob Nichols, highlighting this process in his message to the industry.
The ABA’s latest lobbying push was further strengthened by a joint letter sent by different banking associations last week. The associations wanted the law to include definitions regarding stablecoin returns and to close possible ‘gaps’ in this area.
Opinions differ on the stablecoin front
Yield stablecoins included in the bill have become one of the most intense topics in the crypto policy debate in Washington. The ABA and other financial institutions warn that yield-bearing stablecoins could replace insured deposits and negatively impact credit sources.
Against this, crypto companies and some fintech firms argue that stablecoins offer fast money transfers and innovative payment methods. Critics in the crypto industry, on the other hand, state that banks want such regulations in order not to lose their dominance in the sector.
“The banking cartel is in a state of panic,” said Bernie Moreno, Ohio Senator and pro-crypto politician, and gave the message that the industry is afraid of this process in his post on social media.
Reactions from legal process and economic circles
Discussions regarding yield stablecoins have previously slowed down legislative efforts. Regents reached a compromise to avoid returns similar to deposit interest and only allow rewards similar to credit card points. However, banking institutions continue to pressure Congress for stricter measures.
The White House Council of Economic Advisers stated in its previously published analysis that the use of stablecoins will not harm the banking system. On the other hand, in the report shared by ABA in April, it was claimed that the management addressed the wrong questions and that the real impact would be experienced if yield-yielding stablecoins were allowed.
According to ABA’s analysis, yield-bearing stablecoins could quickly push the market, which is currently around $300 billion, to $2 trillion; This can put serious pressure on banks’ funding sources.
As industry consensus lags, laying the groundwork for comprehensive crypto legislation becomes more difficult. In the medium term, according to the Senate calendar, there is approximately a 10-week working period left before the elections. The shrinking time to devote to crypto among many legislative proposals creates uncertainty among industry representatives.
