TechFlow News, May 5: According to The Block, on Monday, five major U.S. banking trade groups issued a joint statement regarding the latest compromise text of the U.S. Clarity Act, stating that the proposal “fails to achieve its intended objectives.” This statement came just days after Senators Thom Tillis and Angela Alsobrooks finalized the compromise text.
The groups issuing the joint statement include the American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America. They stated, “While Senators Tillis and Alsobrooks aim to achieve the correct policy objective—namely, prohibiting interest and yield payments on stablecoin-based payments—the proposed language falls short of achieving that goal.” Specific concerns center on exchanges’ ability to offer interest through membership organizations, as well as provisions permitting rewards calculated based on “duration, balance, and term.”
The latest text prohibits “regulated entities” from paying U.S. customers any form of interest or yield solely for holding stablecoins—or from making payments that are “economically or functionally equivalent to interest or yield on interest-bearing bank deposits”—but exempts “activity- or transaction-based rewards and incentives” tied to genuine economic activity.
On Monday evening, Senator Thom Tillis responded on X, stating that he and Senator Alsobrooks had engaged in months of negotiations with all stakeholders—including the banking industry—and that “the final outcome is a significantly improved, consensus-driven proposal.” He added, “Some in the banking sector may not wish for these developments to occur, and we respect our differing viewpoints.” The bill still faces other challenges, including how to address potential conflicts of interest involving U.S. President Donald Trump’s crypto-related interests and concerns over illicit finance.
