According to Bloomberg, banking lobbying groups are pushing for last-minute changes to a bipartisan compromise regarding the profitability of stablecoins, reports investing.com.
At the center of the conflict is the CLARITY Act, which seeks to create a clear regulatory framework for the digital asset market, taking into account the competing interests of financial institutions.
The disagreement centers around a compromise reached by Republican Senator Thom Tillis and Democratic Senator Angela Allsbrooks over how issuers of stablecoins can reward their customers.
On Friday, a coalition of six banking lobbying organizations, including the American Banking Association and the Consumer Bankers Association, released the text of amendments that would completely prohibit steblecoin issuers from providing any rewards on their assets.
In a cover letter, the organizations stated that the current exceptions in the bill would “circumvent the purported ban and encourage customers to hold and build up balances in stablecoins to the detriment of bank deposits.”
Crypto industry representatives reacted harshly to the banks’ intervention, seeing it as an attempt to stifle innovation. Paul Gruol, Coinbase’s general counsel, wrote in X (formerly Twitter) that the banking lobby’s proposal is a plan to “destroy competition.”
Gruol emphasized that the industry’s focus has shifted from interest-bearing accounts to “transaction rewards, loyalty programs and other consumer benefits associated with blockchain,” adding, “Enough is enough.”
Despite the objections, the Senate Banking Committee’s decision to proceed with the bill indicates that the legislative initiative is gaining new momentum after the difficulties it faced last summer.
Senators Allsbrooks and Tillis championed the original compromise, which would allow companies to offer rewards if a customer actively uses a stablecoin.
In a joint statement, the senators noted that the current version of the law allows cryptocurrency companies to offer various forms of incentives to customers.
They emphasized that the compromise “helps us get on a bipartisan path to passage of the CLARITY Act by providing the regulatory certainty needed to foster innovation,” while acknowledging that “some in the banking industry may not be interested in either.”
