8 US Banking Trade Groups Demand Stablecoin Rewards Curbs in Clarity Act Covering Bitcoin (BTC)

Banks Escalate Pressure Before Tuesday Vote

Eight US banking trade groups asked Senate leaders on Monday to tighten the stablecoin reward restrictions in the Clarity Act, warning that carve-outs in the latest draft would let interest-like payments drain deposits from lenders. In a joint letter to Majority Leader John Thune and Minority Leader Chuck Schumer, signatories including the American Bankers Association, the Bank Policy Institute and the Independent Community Bankers of America said they could not back the current wording ahead of a key Senate procedural vote scheduled for Tuesday. Under existing law, payment stablecoin issuers are barred from paying interest or yield, but rewards distributed through third parties such as exchanges fall outside that direct prohibition. The groups want the word “solely” removed from the restriction on payments connected with holding stablecoins, an equivalence standard replaced with a broader “substantially similar” test, and language deleted that would permit rewards to vary with a customer's balance, duration or tenure. They argue such incentives would pull away money banks use to fund mortgages, farms and small businesses, with community lenders most exposed, although the letter offers no estimate of potential outflows. The demands renew and extend a push six trade groups began in May. Crypto advocates counter that rewards benefit everyday savers aligned with the community's long-standing HODL ethos, and that the industry needs clear federal rules. The dispute now touches the fastest-growing corner of tokenized dollars, from payment rails to Tether's Stablechain.

Final Text Adds Ethics Curbs

The bill's final text, released Monday by Senator Cynthia Lummis alongside John Boozman and Tim Scott, contains provisions the banks did not emphasize: a sweeping ethics chapter covering public officials. The draft bars the president, vice president, members of Congress and their spouses from issuing or sponsoring digital assets in exchange for compensation, and extends the ban to certified-but-not-yet-sworn-in officeholders. “Issuance” covers not only creating or launching a token but leading or controlling its first sale or distribution, while “sponsorship” reaches paid promotion using an official's name, likeness or office. Officials must also divest stakes of $15,000 or more in digital-asset firms that drew a majority of revenue from issuance or sponsorship in any of the past three years, or move them into a qualified blind trust before the ethics rules take effect, with disclosure to the relevant ethics office within three days. Willful violations trigger disgorgement to the US Treasury plus a penalty set at the higher of 20% of the consideration received or $500,000. Tokens issued in breach face a listing ban at digital asset intermediaries, with brokers that ignore it exposed to fines of up to $250,000 per violation per day. The text also clarifies regulators' responsibilities across trading venues, from centralized platforms to automated market maker structures. Lummis said the draft reflects 126 changes requested by Democrats after more than a year of negotiation.

Bessent's Deposit-Flight Authority

The third flashpoint is deposit flight. The revised text adds a “circuit breaker” allowing regulators to respond when stablecoin inflows seriously harm community bank deposits — a temporary measure running 18 months after enactment, aimed at banks with less than $10 billion in assets. The trade groups reject it, writing that a mechanism activating only after substantial outflows “is not a safeguard at all,” and urging Congress to ban reward structures that function like deposit interest upfront rather than waiting for harm before regulators can act. Treasury Secretary Scott Bessent has pushed back, saying the final draft grants him added authority to protect community banks and that he would use it if stablecoins damage them; his position is laid out in Treasury Secretary Scott Bessent's post on X. The bill also shields blockchain developers — including teams building Layer 2 scaling and other infrastructure — from money-transmitter registration and adds a civil-liability safe harbor, while agriculture-committee provisions impose new limits on affiliate transactions and conflicts of interest and clarify how state consumer protection law applies. Community bankers have carried the fight into senators' home states even as crypto advocates rally support for the bill, and whether these balances satisfy both sides is precisely what Tuesday's vote will test. Readers tracking the market in real time can follow live spot and futures prices on Binance.

Treasury Secretary Scott Bessent's posthttps://x.com/SecScottBessent/status/2099543149773197382

Tuesday Cloture Vote in Focus

COINOTAG's reading of the bill text itself, not the summaries circulating around it: this is a final revised draft, not enacted law, and every provision above — the reward restrictions the banks contest, the ethics regime binding the president, vice president and members of Congress, and the Treasury Secretary's deposit-flight authority — binds only if the Senate advances and passes the measure. The Senate Banking Committee approved the bill 15-9 in May 2026, with backing from BlackRock, Fidelity, Goldman Sachs, Charles Schwab and SoFi. If cloture fails Tuesday, the banking groups' letter becomes the template for the next redline; if it succeeds, stablecoin rewards design becomes a day-one compliance question for issuers and intermediaries alike.