The American Bankers Association is warning that the Senate's Clarity Act, as currently written, could push banks to move deposits into stablecoins — unless lawmakers tighten yield limits first. The trade group, which represents the nation's largest banks, argues the bill lacks guardrails to prevent a rapid shift of customer funds out of traditional accounts and into digital assets.
The core of the warning
The ABA's concern centers on how the Clarity Act treats yield-bearing stablecoins. If banks can offer higher yields on stablecoin products than on conventional savings or checking accounts, the group says, depositors could flee en masse. That flight would strain bank liquidity and potentially destabilize the broader financial system.
The association did not specify which stablecoins or issuers it worries about. But the message is clear: without explicit limits on the yields banks can offer through stablecoin products, the legislation could accelerate exactly the kind of deposit outflow regulators have long tried to prevent.
What the ABA wants
The American Bankers Association is calling on the Senate to amend the Clarity Act before it moves forward. Specifically, the group wants tighter caps on the interest rates banks can pay on stablecoin-linked accounts. They argue that without those caps, the act would create an uneven playing field — favoring digital deposits over insured bank deposits.
Stablecoins have grown rapidly in recent years, but they remain largely unregulated at the federal level. The Clarity Act is one of several bills in Congress aiming to bring them under a formal framework. The ABA's position suggests that even banks, which might benefit from issuing their own stablecoins, see risks in a law that doesn't set boundaries on yields.
The trade group also warned that deposit flight could undermine the Federal Deposit Insurance Corporation's mission. If money shifts from FDIC-insured accounts into stablecoin wallets, those funds lose the government backstop. That could leave consumers exposed if a stablecoin issuer fails.
Whether lawmakers will tighten the yield limits before the bill advances remains an open question. The Senate Banking Committee has not yet scheduled a markup of the Clarity Act, and no amendments have been publicly proposed.
