Sen. Bernie Moreno (R-OH) accused the American Bankers Association of being in 'full panic mode' over the CLARITY Act's stablecoin yield provisions, as the Senate Banking Committee prepared to mark up the bill Thursday morning. The charge came after ABA CEO Rob Nichols sent a letter to every bank CEO on May 10 urging 'immediate engagement' to lobby against the legislation, warning of deposit flight into stablecoins. A successful markup would send the bill to a full Senate floor vote; a stall, Moreno warned, could sideline U.S. crypto legislation for the rest of the session.
The 'full panic' letter
Nichols's Sunday missive didn't mince words. He told bank CEOs the CLARITY Act, which would allow stablecoin issuers to pay rewards that aren't 'economically or functionally equivalent' to deposit interest, threatens to pull deposits out of traditional banking. Moreno framed the response as desperation. 'They're in full panic mode because their monopoly on payments is cracking,' he said, pledging to vote to 'break the cartel.' Polymarket bettors appear to agree — they give the bill a 73% chance of becoming law in 2026.
What the CLARITY Act says about yield
The disputed compromise text, brokered by Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), draws a careful line. It bars stablecoin yields that are 'economically or functionally equivalent' to deposit interest — language designed to placate banks — but explicitly permits rewards tied to bona fide platform activity. That leaves room for things like cashback or loyalty points without triggering a full-blown bank-like interest product. The ABA sees that as a leaky dam; crypto advocates see it as a sensible carve-out.
A refused meeting
Patrick Witt of the President's Council of Advisors for Digital Assets told reporters that the ABA turned down White House meetings on the yield issue back in February. 'They wouldn't even sit down,' Witt said. The refusal suggests the banking lobby preferred to fight the bill outright rather than negotiate. That strategy may now be backfiring — the compromise has enough bipartisan support to clear committee, and Moreno's rhetoric is rallying pro-crypto senators.
Thursday's markup is the first real procedural hurdle. If the bill advances, it heads to the Senate floor — a long-shot venue for any crypto legislation, but one that's suddenly within reach. The clock is ticking: a stall now could push the bill into a crowded election-year calendar, effectively killing it for the session. Moreno and Tillis are betting the bank lobby has overplayed its hand. The next 48 hours will tell.
