ChainCatcher report: The Independent Community Bankers of America (ICBA), representing approximately 5,000 U.S. community banks, is opposing the CLARITY Act. ICBA Chair and CEO Rebeca Romero Rainey stated that the “loopholes” related to stablecoin rewards must be fully closed, with no room for compromise. The ICBA argues that stablecoins could lead to $1.3 trillion in deposits leaving the banking system and reduce local lending by $850 billion. The association has persuaded Republican Senators Josh Hawley and Jerry Moran to oppose the current version of the bill. Rebeca Romero Rainey noted there is no evidence that cryptocurrency will replace these deposits and reinvest them into local communities. She also criticized the White House Council of Economic Advisers’ (CEA) report, “The Impact of a Stablecoin Yield Ban on Bank Lending,” for downplaying banks’ concerns about deposit outflows. The Senate plans to vote on the CLARITY Act on September 15; without support from at least 60 senators, the bill will fail to advance and may be stalled indefinitely.
U.S. Community Bankers Push for Ban on Stablecoin Rewards, Warn of $1.3 Trillion Deposit Loss
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Summary
The Independent Community Bankers of America (ICBA) is advocating for a ban on stablecoin rewards, calling it a dangerous loophole in stablecoin regulation. The group warns that such rewards could trigger $1.3 trillion in deposit outflows and reduce local lending by $850 billion. ICBA has urged senators to oppose the CLARITY Act, which currently permits these incentives. The Senate will vote on the bill on September 15. A ban on stablecoin yields remains a key demand as lawmakers debate the final version.
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