BlockBeats report, on May 5, a coalition of major U.S. banks stated that despite senators' efforts to ban stablecoin yield generation through the CLARITY Act, the latest wording in the bill still contains loopholes that fail to effectively prevent bank deposit outflows or adequately protect bank deposits.
In a joint statement issued on May 5, 2026, the American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America stated that Section 404 of the bill creates a “significant loophole” by allowing crypto platforms to pay users interest or yields on deposits that resemble traditional bank deposits, outside established regulatory frameworks. The banks warned that if this loophole is not closed, widespread adoption of stablecoins could lead to trillions of dollars in deposit outflows from the U.S. banking system—particularly impacting community banks—and may reduce consumer, small business, and agricultural lending by more than one-fifth.
Senator Thom Tillis responded that the current text represents a compromise: it prohibits stablecoin rewards on idle balances while allowing crypto platforms to offer "other forms of customer rewards," creating a pathway for bipartisan passage of the bill. However, the banking industry stated it will submit specific amendment proposals to lawmakers in the coming days.
The current text of the CLARITY Act was made public last Friday, and the crypto industry, including Coinbase, is pushing for a vote in the Senate next week.