The American Bankers Association wants the Clarity Act to pass — but says it needs small fixes first. CEO Rob Nichols told CNBC's Squawk Box on Wednesday that the banking lobby supports the bill's goals, but two paragraphs require 'surgical edits,' particularly around stablecoins and local lending. The bill, roughly 600 pages, has been stalled since the House passed it last year. Now lawmakers are racing to push it through before Congress leaves for August recess.
The 'Surgical Edits' Nichols Wants
Nichols didn't spell out the exact language he wants changed, but the friction points are clear. Banks worry that if crypto exchanges can offer yield on stablecoins, they'll pull deposits away from traditional lenders. That's a direct threat to their deposit base. The ABA also wants guardrails on how stablecoins interact with local lending — a nod to community banks that fear being cut out of the loop. 'The crypto and banking sectors can coexist, and the US can be the crypto capital of the world,' Nichols said. But he stressed that the current draft needs those two paragraphs tweaked.
Why Coinbase Pulled Support
Coinbase backed the bill early on, but pulled its support in January after clashing with banking chiefs. The dispute? Whether stablecoin issuers should be allowed to earn yield. Banks argued it should be banned. Coinbase's chief policy officer, Faryar Shirzad, dismissed those concerns, pointing out that top lenders like JP Morgan and Bank of America are already exploring or debuting their own stablecoin products. 'They're adopting the technology they want to restrict,' he said in a statement at the time.
Bipartisan Push — and Warren's Criticism
GOP lawmakers are leaning on Democrats to get the bill across the finish line. Bipartisan support exists, but Senator Elizabeth Warren has come out swinging. She claims the revised draft would let President Trump profit from crypto and would benefit criminals. The new draft does include a ban on officials and their families issuing or promoting crypto — a direct response to ethics concerns. Major institutions including Fidelity and Goldman Sachs, along with crypto lobby groups and some politicians, say the revised bill works as written.
The clock is the real enemy here. Congress is expected to break for recess in a few weeks, and the Clarity Act still needs a Senate vote. Nichols' comments suggest the banking lobby won't block the bill outright, but those two paragraphs could still be a sticking point. If lawmakers can't agree on the stablecoin language, the whole thing could slip to the fall — or worse, die entirely. The Senate is expected to take up the bill next week.
