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US banking groups urge Senate to strengthen stablecoin rules
The groups warned the current Clarity Act language could let stablecoins function like bank deposits, raising the risk of deposit flight from community banks.
US banking groups are urging the Senate to tighten stablecoin provisions in the Clarity Act, warning that the current draft could change how money moves within the banking system.
According to The Block, the groups argue the bill as written may allow stablecoins to substitute for bank deposits.
They say that could increase the risk of deposit flight from community banks, potentially weakening those institutions’ deposit base.
The banks are therefore asking lawmakers for stronger requirements to address that risk as the legislation moves forward.