Banking groups escalate fight over stablecoin yield ahead of Senate vote

The American Bankers Association amplified warnings the Senate’s Clarity Act could push deposit flight into stablecoins unless lawmakers tighten yield limits.

What to know:

• The American Bankers Association is heating up its lobbying of senators to tighten stablecoin provisions in the Clarity Act, warning that updated language could still undermine bank deposits and financial stability.
• Bank trade groups argue that yield-bearing stablecoins could act as substitutes for insured deposits and drain funding for mortgages and business loans, while crypto and fintech firms say stablecoins offer faster payments and new ways to move money online.
• The clash over stablecoin yield, which has already complicated work on the Senate’s GENIUS Act, threatens to slow broader crypto legislation as the Banking Committee prepares to mark up the Clarity Act this week.

The American Bankers Association (ABA) is mounting an aggressive lobbying push against portions of the Senate’s Digital Asset Market Clarity Act ahead of a scheduled Banking Committee markup on Thursday, warning lawmakers that stablecoin provisions in the updated bill could still undermine bank deposits and weaken financial stability.

In a call-to-arms circulated to bank executives nationwide, the ABA petitioned banks and their employees over the weekend to contact senators immediately to push for tighter restrictions on payment stablecoins in the crypto market structure bill. The group said the latest version of the legislation — after months of bank lobbying, meetings and input — still leaves room for crypto firms to offer interest-like rewards that may encourage consumers to move money out of traditional bank accounts.

The Senate Banking Committee is expected to release updated legislative text as soon as Monday, with comments and amendments from lawmakers likely to emerge Tuesday before Thursday’s committee vote on the Clarity Act.

"We need your help to drive this message home before senators consider this legislation," ABA president Rob Nichols said in the request.

The ABA’s campaign follows a joint letter sent last week with other banking trade associations that outlined proposed edits to the bill. The groups argued lawmakers need to close what they describe as a loophole around stablecoin yield before advancing the legislation.

The dispute has become one of the defining battles in Washington’s crypto policy debate. Bank executives and trade groups have argued that yield-bearing stablecoins could function as substitutes for insured deposits, draining funding that banks rely on to make mortgages, business loans and other forms of credit.

Supporters of stablecoins, including many crypto firms and fintech companies, argue the products offer consumers faster payments and new ways to move money online. Critics in the crypto industry say banks are trying to preserve their dominance by limiting how digital dollar products compete for users.

"The banking cartel is in full panic mode," U.S. Senator Bernie Moreno, an Ohio Republican who has been staunchly pro-crypto, posted on social media site X.

The fight previously delayed legislative progress, and lawmakers eventually negotiated a compromise that would prohibit stablecoin yield resembling deposit interest while allowing activity-based rewards programs similar to credit-card points. Even after those changes, major banking groups have continued pressing Congress for stricter guardrails.

While the White House Council of Economic Advisers had released an analysis on stablecoins that suggested their deployment wouldn't damage the banking system, ABA economists answered with their own study in April. The banking group argued the administration focused on the wrong policy question by analyzing the effects of banning stablecoin yield rather than the consequences of allowing it. According to the ABA, permitting yield-bearing stablecoins could rapidly scale the market from roughly $300 billion today to as much as $2 trillion, increasing pressure on bank funding.

The longer negotiations drag on, lawmakers and industry participants warn, the harder it may become to move comprehensive crypto legislation through the Senate and onto the floor for a final vote. About 10 weeks of Senate floor time remain before the midterm elections, according to the current Senate calendar, and there are a lot of competing interests for that legislative bandwidth.

UPDATE (May 11, 2026, 14:55 UTC): Adds response from Senator Bernie Moreno.

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