Rewards

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America

Eight of the largest U.S. banking trade groups have sent a joint letter to Senate Majority Leader <a href="https://x.com/LeaderJohnThune" rel="noopener noreferrer nofollow">@LeaderJohnThune</a> and Democratic Leader <a href="https://x.com/SenSchumer" rel="noopener noreferrer nofollow">@SenSchumer</a> urging changes to the Digital Asset Market Clarity Act ahead of a critical procedural vote scheduled for Tuesday, September 15.
<h2 id="the-circuit-breaker-problem">The Circuit Breaker Problem</h2>
<cite>A broad coalition of U.S. banking groups, including the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America (ICBA), wrote the Senate's two top leaders on Monday seeking changes to the bill.</cite> Their central objection targets a deposit-flight safeguard added to the latest draft.
<cite>The coalition singled out a proposed deposit-flight "circuit breaker" that would allow regulators to intervene if stablecoins begin causing significant losses of bank deposits, arguing that "a circuit breaker that activates only after substantial deposit flight has already occurred is not a safeguard at all."</cite>
<cite>The ICBA provided further detail in a separate letter, noting the proposal would cover an 18-month period after the law takes effect and could trigger action if regulators determine transfers into payment stablecoins have caused a "substantial detrimental impact" on deposits at community banks with less than $10 billion in assets.</cite>
<h2 id="stablecoin-rewards-and-the-path-to-a-vote">Stablecoin Rewards and the Path to a Vote</h2>
<cite>The banking groups also called for tighter language, writing that "further technical refinements are needed to ensure that the text clearly and directly prohibits interest-like payments on payment stablecoins."</cite> Banks argue the current wording contains loopholes that would effectively allow yield-like payments on stablecoin balances, pulling deposits away from traditional lenders.
<cite>The dispute pits banks' concerns about deposits and lending against crypto advocates' argument that stablecoin rewards have not been shown to cause deposit flight and that lawmakers have already addressed the issue.</cite>
<cite>Senate sponsors released a final 635-page CLARITY Act draft on September 14, 2026, adding Treasury circuit-breaker authority if payment stablecoins drive deposit flight from community banks, ahead of Tuesday's cloture vote.</cite><cite>Sponsors said the text reflects over a year of negotiations and 126 substantive changes requested by Democrats.</cite>
<cite>Invoking cloture, which does not pass the bill outright, requires 60 votes, and negotiators have yet to fully resolve disputes over ethics clauses, illicit finance, and the stablecoin rewards question.</cite><cite>If the bill fails to secure those votes, it will essentially be dead for 2026.</cite>
Sources: <a href="https://www.coindesk.com/policy/2026/09/14/banks-escalate-stablecoin-rewards-fight-as-senate-prepares-for-a-clarity-act-vote" rel="noopener noreferrer nofollow">CoinDesk: Banks escalate stablecoin rewards fight as Senate prepares for a Clarity Act vote</a> <a href="https://www.cnbc.com/2026/09/14/clarity-act-senate-vote-crypto-regulation.html" rel="noopener noreferrer nofollow">CNBC: Clarity Act faces make-or-break Senate vote as crypto industry pushes for bill</a> <a href="https://www.theblock.co/news/regulation/2026-08-08-majority-leader-thune-files-cloture-on-clarity-act-setting-up-sept-15-senate-vote-411211" rel="noopener noreferrer nofollow">The Block: Majority Leader Thune files cloture on Clarity Act, setting up Sept. 15 Senate vote</a>

Eight banking trade groups say the CLARITY Act circuit breaker would trigger too late to protect deposits

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