Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—Banking groups ask lawmakers to tighten stablecoin rules in Clarity Act, (Jul 14, 2026)
Organizations Mentioned:American Bankers Association | Independent Community Bankers of America
By Nora Macaluso
National and state banking associations suggested several changes aimed at ensuring stablecoins remain “transaction tools.”
The American Bankers Association (ABA), Independent Community Bankers of America (ICBA), and 76 state banking associations asked Senate leaders to tweak language in the Clarity Act, digital asset legislation currently under consideration in Congress, to ensure that stablecoins cannot function as substitutes for bank deposits.
“We appreciate the efforts that have been made to address concerns regarding stablecoin interest, yield, and rewards, and we recognize the substantial work undertaken to develop provisions intended to distinguish payment-related functionality from deposit-like products,” the groups wrote in a letter to Senate Majority Leader John Thune (R-S.D.) and Minority Leader Charles Schumer (D-N.Y.).
At the same time, the groups said, they have “genuine concerns” that “ambiguities” in the bill as written could “encourage stablecoin arrangements to effectively function as substitutes for deposits, despite Congress's longstanding and clearly stated intent that payment stablecoins should serve as transaction tools rather than store-of-value products.”
The associations urged lawmakers to make “targeted revisions” to the bill clarifying the prohibition on interest and yield, to replace a standard on “functional and economic equivalent” in the bill with a “substantially similar” standard, and to remove language they said could create ambiguity about rewards or benefits and lead to “deposit flight.”
The letter included suggested changes to the legislation that the groups said would provide greater certainty that incentives cannot be used in ways that undermine congressional intent. They suggested removing a subsection on permissible payments of benefits or rewards in its entirety.
“Clarifying these provisions would help establish durable rules of the road, support responsible innovation, and provide the clearest path to achieving Congress’s stated objective while reducing the risk of unintended consequences for consumers and communities alike,” the associations said.
“For community financial institutions, the consequences of deposit flight are not theoretical,” the letter continued. “Deposits gathered in cities, towns, and rural communities are reinvested through mortgage lending, small-business financing, agricultural credit, and other forms of relationship banking that support local economic growth. Ensuring that stablecoin regulations draw clear and enforceable boundaries around interest- and yield-like incentives is therefore essential to preserving the flow of credit that local communities depend upon.”
The groups said they are “committed to working constructively with policymakers” to resolve their issues.
Banking associations from states including Delaware, Massachusetts, California, and New York joined the ABA and ICBA in signing the letter.
Companies: American Bankers Association; Independent Community Bankers of America
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