The American Bankers Association calls for tightening stablecoin reward restrictions; the Senate committee will vote on cryptocurrency legislation on Thursday.

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Deep Tide TechFlow News, May 11th, according to The Block, the American Bankers Association (ABA) CEO Rob Nichols sent a letter to major bank executives on Sunday evening, urging them to contact senators to further tighten the provisions related to stablecoin rewards before the Senate Banking Committee’s markup vote on Thursday. Nichols warned that the current draft fails to effectively prevent crypto companies from offering “interest-like rewards” to users, which could lead to significant bank deposit outflows and threaten economic growth and financial stability.

The current draft is being negotiated by Senators Angela Alsobrooks and Thom Tillis, prohibiting payments of interest or yields to users holding stablecoins, but allowing rewards linked to real activities or transactions. This clause has received support from Coinbase. Banking industry groups believe that the relevant exception clauses have loopholes that could be circumvented, and on May 8th, they jointly wrote to Committee Chairman Tim Scott and Democrat Elizabeth Warren, requesting technical revisions to the wording of the provisions.

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