Community banks have reinvigorated efforts to block stablecoin yield provisions in the Digital Asset Market Clarity Act, reversing earlier compromises and threatening the bill's passage in the Senate.
The Independent Community Bankers of America (ICBA), which represents approximately 5,000 community banks across the U.S., has called for the complete elimination of stablecoin rewards rather than limiting them to activity-based incentives as previously negotiated. Rebeca Romero Rainey, president and CEO of ICBA, stated that compromise on this issue is untenable.
"There's not a middle ground in terms of resolution," Rainey said in an interview with Banking Dive. "For us, this loophole has to be closed entirely."
The ICBA's position centers on concerns about deposit flight. The organization estimates that $1.3 trillion could flow out of the banking system into stablecoins, which would reduce local bank lending by approximately $850 billion. Rainey emphasized that cryptocurrency deposits would not circulate back into local communities through traditional banking channels.
The ICBA's renewed opposition has influenced at least two Republican senators—Josh Hawley and Jerry Moran—to oppose the CLARITY Act in its current form. The Senate is scheduled to vote on the bill on September 15, but support appears insufficient to reach the 60 votes needed to advance the legislation, which could result in its defeat.
Rainey also criticized a White House Council of Economic Advisers report on stablecoin yield effects, arguing that it fails to account for significant changes to the banking environment if the legislation passes.
