The ABA has published a new letter in opposition to the Clarity Act.
Specifically, the written document representing many of America’s community banking groups and associations includes an updated request pushing to further restrict stablecoin yield.
Stablecoin Yields And The Clarity Act
The letter presents a slight change in tone where for a brief moment, it commends the “efforts that have been made” in order to reach a mutual agreement between the banking and crypto industries.
However, there is persistence to ensure that favorable language is improved upon.
This time round, there are two very specific recommendations that broadens the base for regulation to tackle any form of stablecoin rewards/yield paying mechanisms.
This includes removing the terms “solely”, “on a payment stablecoin balance”, and “interest-bearing bank deposit”, as well as making a case to substitute “functional and economic equivalence” with “substantially similar” in the final draft of the Clarity Act.
Can The Clarity Act Pass In Time?
While the argument surrounding the parameters of stablecoin yield intensified in January, it was the feeling among industry participants that this achieved a compromise from key senators at the end of April.
As such, the critical negotiation had switched its focus in May and June towards other clauses.
Namely, this involved making a deal on ethics, the BRCA act, and ensuring there is support from federal and state law enforcement bodies, out of which the former largely remains to be sorted.
Having already passed the Senate Banking Commission markup, the Clarity Act is now nearing its early August deadline.
If not voted on in the Senate and merged with last year’s version from the House in time, there is a risk that this bill is not going to be progressed at all.
Afterwards, there is a summer recess and it will be increasingly difficult to build up momentum to pass the digital asset bill as attention then shifts to U.S. midterms in November.
