Banking Trade Groups Urge Senate Banking Leaders to Strengthen Stablecoin Yield Guardrails to Prevent Deposit Flight

Washington (May 8, 2026) - A coalition of financial trade associations representing banks of all sizes today urged Senate Banking Committee leaders to make important technical refinements to proposed payment stablecoin yield language in the CLARITY Act, warning that allowing interest-like yield on stablecoins could weaken bank deposits and reduce credit available to consumers, small businesses and farmers.

In a new letter to Chairman Tim Scott and Ranking Member Elizabeth Warren, the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, Independent Community Bankers of America and National Bankers Association express appreciation for recent efforts to improve the legislation's Section 404 by Senators Tillis and Alsobrooks, while noting that additional changes are needed to ensure the bill clearly prohibits interest-like payments on stablecoins and avoids unintended loopholes. The groups said they remain committed to working with the Administration, Congress, regulators and other stakeholders to advance responsible innovation while safeguarding the strength of the U.S. financial system.

"Our concern is that payment stablecoin yield, or incentives that act like yield, can reduce U.S. deposits and, in turn, banks' capacity to extend credit across the country," the groups wrote.

The letter, which was also shared with other members of the Senate Banking Committee, emphasizes that deposits play a critical role in supporting lending and economic growth nationwide, and that ambiguities in the current language could incentivize customers to shift funds out of the banking system.

"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," the groups said.

The associations urged lawmakers to make targeted revisions to clarify the prohibition on interest and yield, eliminate provisions that could be used to circumvent congressional intent, and better align the bill's text with the goal of protecting consumers and financial stability.

"Our goal in offering these recommendations, which we believe are consistent with Senator Tillis and Senator Alsobrooks' critical policy goal of stopping deposit flight, is to ensure any final legislation signed into law ushers in a new financial market designed to fully accommodate digital assets and blockchain technologies, while also protecting the economic resilience of America's consumers, small businesses, and communities," the letter concludes.

Read the full letter.

About the American Bankers Association

The American Bankers Association is the voice of the nation's $25.1 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.7 trillion in deposits and extend $13.2 trillion in loans.

About Bank Policy Institute

The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud and other information security issues.

About Consumer Bankers Association

The Consumer Bankers Association represents America's leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA's corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on X @consumerbankers.

About Financial Services Forum

The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.

About the Independent Community Bankers of America

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation's community banks through effective advocacy, education, and innovation. As local and trusted sources of credit, America's community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers' financial goals and dreams. For more information, visit ICBA's website at icba.org.

About the National Bankers Association

Founded in 1927, the National Bankers Association (NBA) is the premier trade association representing the nation's mission-driven banks. NBA's mission is to strengthen mission-driven banks through advocacy, research, partnerships, and innovation, ensuring that financial services are accessible, affordable, and inclusive for all. For more information visit nationalbankers.org.