A U.S. Banking Industry Trade Group Says the Senate Stablecoin Incentive Compromise Plan Is “Not Sufficient”

Deep Tide TechFlow News, May 5th, according to The Block reports, the five major American banking trade groups issued a statement on Monday regarding the latest compromise text of the U.S. Clarity Act, stating that the proposal “did not meet expectations.” This statement came only days after Senators Thom Tillis and Angela Alsobrooks finalized the compromise plan.

The groups jointly issued the statement, including the American Bankers Association, the Banking Policy Research Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America. They stated that “Tillis and Alsobrooks aim to achieve the correct policy goals, namely prohibiting stablecoin payment yields and interest, but the proposed wording fails to accomplish this.” Specific concerns involve how exchanges provide interest through member organizations and provisions allowing rewards calculated based on “duration, balance, and tenure.”

The latest text prohibits “regulated parties” from paying any form of interest or yield to U.S. customers solely due to holding stablecoins, or paying in a manner “economically or functionally equivalent to interest or yield on bank deposits,” but does not apply to “activity- or transaction-based rewards and incentives” linked to real activities.

Senator Thom Tillis responded on the X platform Monday evening, saying he and Alsobrooks have been in negotiations with all stakeholders, including the banking industry, for several months, and “the final result is a significantly improved, consensus-based plan,” adding that “some in the banking industry may not want these things to happen, but we respect each other’s differing opinions.” The bill still faces other challenges, including how to address conflicts of interest related to U.S. President Trump and concerns over illegal financial activities.