Bullish CEO & Former NYSE President Questions Big Banks’ Arguments Against CLARITY Act

• Bullish CEO and former NYSE President Tom Farley doubts that big banks are truly protecting the interests of small, community banks in their continued lobbying efforts against the CLARITY Act.

Tom Farley, CEO of Bullish and former President of the New York Stock Exchange (NYSE), has recently stirred the pot in the heated discussion about the Digital Asset Market CLARITY Act. He questioned the true motives of big banks in their continuing efforts to block the pending legislation.

Big Banks and Trade Groups’ Desperate Push Against the CLARITY Act

Lately, the American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) have intensified their lobbying in the Senate to dissuade Majority Leader Senator John Thune and Minority Leader Senator Charles Schumer from supporting the current form of the bipartisan bill.

The trade groups allied with the big banks once again argued that Section 404 of the CLARITY Act is too ambiguous to provide sufficient safeguards preventing deposit flight from banking institutions to stablecoins. They reiterated their earlier concerns during the pre-markup discussions that the situation could negatively impact community banks. The Bank of America (BOA) previously claimed that allowing stablecoin yields would trigger more than $6 trillion in capital flight favoring digital assets.

ADVERTISEMENTSenators eventually ironed out a compromise to address the issue. The CLARITY Act’s current language bans passive interest on payment stablecoins but allows activity-based transaction rewards. However, big banks and their allied trade groups insist on stricter wording on the bill to prevent potential loopholes that would affect bank deposits.

Bullish CEO & Former NYSE President Questions True Motives of Big Banks

Farley stated that he’s “ not 1,000% convinced” that the Wall Street banks’ continuing objection to the CLARITY is really to prevent deposit flight from small community banks. His comment reflects the public’s suspicion that the big banks’ persistence in blocking the bill is all about protecting their own interests, rather than those of smaller institutions.

Under the present banking model, large financial institutions pay depositors minimal interest rates, which are often a fraction of a percent for ordinary depositors. Meanwhile, they flip the same funds into high-yield Treasuries to pocket the highly lucrative spread.

ADVERTISEMENTFarley drives a point in the discussion, highlighting that the big banks are only defending the spread and simply using small community banks as a convenient excuse to prevent high-yield stablecoins from ruining their long-running business model.

Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, seconded the Bullish CEO’s remarks. He sarcastically asked, “You mean to tell me that the people who have been gobbling up community bank market share for the past 30 years might not have the community banks’ best interest at heart?”

Previously, the White House official also responded to the ABA and the ICBA’s latest lobbying efforts against the stablecoin yield provisions of the CLARITY Act, telling them to “give it a rest.”

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