The American Bankers Association sent an emergency Sunday letter urging bank CEOs to oppose a stablecoin yield loophole in the Digital Asset Market Clarity Act. The move comes 72 hours before a pivotal Senate Banking Committee markup scheduled for Wednesday. The bipartisan bill aims to establish federal crypto regulation but has sparked alarm over potential deposit outflows.
Bill's Delicate Compromise
Months of negotiations produced a framework banning passive yield on stablecoins while permitting narrow activity-based rewards. Sens. Thom Tillis and Angela Alsobrooks crafted the deal after White House-convened sessions. Coinbase Chief Legal Officer Paul Grewal called the ABA's concerns misplaced, noting the compromise already addresses yield restrictions.
Banking Lobby's Escalating Campaign
The ABA and allied bank groups argue the deal doesn't sufficiently prevent deposit flight. They'd previously joined 52 state bankers associations in a December warning letter to Congress and followed with similar pleas to the OCC in April. The Sunday letter marks the banking industry's most urgent push yet.
White House Meetings Snubbed
Patrick Witt, who hosted the administration's stablecoin yield discussions, confirmed he personally invited ABA CEO Rob Nichols and other bank trade group leaders. They declined attendance. The White House involvement began months ago but banking executives stayed away from key sessions.
Senate Skepticism Grows
Sen. Bernie Moreno directly accused the ABA of deception, labeling it 'the banking cartel in full panic mode.' He pledged to support advancing the Clarity Act. The banking lobby's emergency outreach signals deepening divisions ahead of Wednesday's markup.
The Senate Banking Committee will take up the bill on May 14, a critical step before it faces the 60-vote threshold required for Senate floor passage.
