Ahead of a possible markup of digital assets market structure legislation this week, ICBA and other groups asked senators to address critical concerns regarding the risk of deposit flight and diminished credit and lending associated with permitting yield on payment stablecoins.
Details: In a letter to members of the Senate Banking Committee, ICBA and the other groups said they appreciate Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) for their efforts to improve Section 404 of the CLARITY Act but additional work is needed to arrive at text that embraces the innovation represented by digital assets while protecting consumers, ensuring the stability of the U.S. financial system, and mitigating the risks to Main Street communities posed by the payment of yield or interest on payment stablecoins.
Statement: In a joint news release, ICBA and the other groups said: “Research indicates that deposit flight driven by the widespread adoption of yield‑bearing stablecoins could reduce consumer, small business, and agricultural lending by one‑fifth or more, highlighting the stakes involved in ensuring that the statutory framework is both precise and robust.”
More ICBA Advocacy: ICBA last week called on policymakers to pause new policies on stablecoins, Federal Reserve master accounts, and OCC national trust charters to assess their combined impact on local communities and the broader economy.
Urgent Grassroots Push: With the Senate Banking Committee set to mark up digital assets market structure legislation this week, ICBA is urging community bankers to use its Be Heard grassroots action center to call on lawmakers to fully prohibit the payment of interest, yield, rewards, or similar inducements on payment stablecoins by exchanges, affiliates, and other market participants.