Major U.S. banks asked the Senate to amend the CLARITY Act and ban any form of compensation for holding stablecoins.

Banks' request to the Senate

The banks urged amendments to the CLARITY Act to explicitly prohibit interest, bonuses, cashback and other incentives tied to stablecoin custody.

They emphasized that such measures are intended to reduce the risk of large-scale deposit outflows from the traditional banking system.

Proposed scope of the ban

Under the proposal, banks want to ban not only explicit interest but also promotional rewards and transactional rebates linked to stablecoin balances.

Proponents say the measure would preserve deposit bases and maintain banks' capacity to fund lending across the economy.

Industry concerns and potential effects

Banks warn that without restrictions, consumers could shift significant deposits into higher-yielding stablecoin products, accelerating liquidity pressures on commercial banks.

They also argue that uneven regulatory treatment between crypto providers and banks could distort competition and financial stability dynamics.

Next steps

The request is positioned to influence forthcoming legislative debates and regulatory guidance regarding compensation practices for crypto financial products.