The American Bankers Association (ABA) is intensifying its lobbying against the Senate’s Digital Asset Market Clarity Act, warning that stablecoin provisions still allow interest-like rewards that could drain bank deposits. In a weekend call to action, ABA president Rob Nichols urged bank executives to contact senators before Thursday’s Banking Committee markup. The ABA, along with other banking groups, argues that yield-bearing stablecoins could substitute for insured deposits, undermining bank lending and financial stability. They estimate the stablecoin market could grow from $300 billion to $2 trillion if yield is permitted. The bill, after months of negotiation, includes a compromise prohibiting yield resembling deposit interest but allowing activity-based rewards. Banking groups say this loophole remains. Pro-crypto Senator Bernie Moreno accused banks of panicking to preserve dominance. The White House Council of Economic Advisers previously released an analysis suggesting stablecoins wouldn’t harm banking, but the ABA countered with its own study. With about 10 weeks of Senate floor time before midterms, the ongoing dispute threatens to delay crypto legislation.

Key facts

• ABA warns senators that Clarity Act stablecoin provisions could fuel deposit flight.
• Banking groups claim yield-bearing stablecoins could grow from $300B to $2T.
• Compromise bans interest-like yield but allows activity-based rewards; ABA says loophole remains.
• Senator Moreno accuses banking 'cartel' of panicking to protect dominance.
• Senate Banking Committee markup scheduled for Thursday; floor time limited before midterms.

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