American Bankers Affiliation (ABA) CEO Rob Nichols despatched an emergency Sunday letter to each financial institution CEO within the nation, urging “immediate engagement” towards what he known as a stablecoin yield loophole within the Digital Asset Market Readability Act, days earlier than a Senate Banking Committee markup scheduled for Thursday.
The letter, dated Could 11 — Mom’s Day — and addressed to ABA member financial institution CEOs, requested financial institution leaders to contact their senators and mobilize their staff to do the identical earlier than the committee convenes for a scheduled Could 14 government session on the invoice.
“I am reaching out to make every bank leader in this country aware of an urgent advocacy fight that requires your immediate engagement,” Nichols wrote, in line with the letter. He warned that, with out additional modifications, “we believe the current proposal would unnecessarily incentivize the flight of bank deposits into payment stablecoins, putting both economic growth and financial stability at risk”.
CLARITY Act vote looms
The ABA’s emergency outreach got here hours after the Senate Banking Committee on Friday introduced plans to mark up H.R. 3633, the Digital Asset Market Readability Act of 2025 — a bipartisan invoice that will set up a complete federal regulatory framework for digital belongings, resolve longstanding jurisdictional questions between the SEC and CFTC, and set buying and selling guidelines for crypto markets.
The timing of the letter drew sharp public pushback from Coinbase Chief Authorized Officer Paul Grewal, who posted on X that the ABA’s alarm bells had been misplaced. “Maybe the CEO didn’t get the message from the people actually in the room at the WH in meeting after meeting,” Grewal wrote. “We’ve already had ‘immediate engagement.’ You got ‘idle yield’ killed. I know because I was there — you weren’t. Take yes for an answer. Move on. Stop wasting the time of the Senate and the American people.”
Sen. Bernie Moreno, a member of the Senate Banking Committee, fired again on the ABA in a social media put up, saying “the banking cartel in full panic mode” and accusing it of deceiving lawmakers by characterizing stablecoin yield as a “loophole” — a time period he stated was an insult to the bipartisan work already performed through the GENIUS Act debate.
Moreno stated he would vote to advance the Readability Act Thursday, declaring: “Innovation, freedom, and the American people will win.
Grewal and Moreno’s posts referenced months of negotiations that included at least three White House-convened sessions between crypto industry representatives and banking trade groups aimed at resolving the stablecoin yield dispute.
Those talks produced a compromise, negotiated by Sens. Thom Tillis (R-N.C.) and Angela Alsobrooks (D-MD.), that bans passive yield on stablecoin balances while permitting certain narrowly defined activity-based rewards. The ABA and its allied bank groups have said that framework does not go far enough.
Speaking at Consensus Miami on May 7, Grewal said he supports the current compromise as “decent” and described the banking sector’s continued opposition as bitter grapes over a struggle they’d already largely gained.
Patrick Witt, who hosted the White Home stablecoin yield conferences in February, stated he personally invited Nichols and different financial institution commerce CEOs to attend — they usually declined.
The banking trade’s failing crypto foyer
The banking trade has spent months arguing that even partial stablecoin yield — notably when routed by way of exchanges and third-party platforms relatively than issuers instantly — might set off large deposit outflows from federally insured banks.
A joint reality sheet launched by the ABA, Financial institution Coverage Institute, Shopper Bankers Affiliation, Monetary Companies Discussion board, and Impartial Group Bankers of America cited a Treasury Division report estimating that stablecoins might result in as a lot as $6.6 trillion in deposit outflows if yield is permitted.
That determine faces pushback from throughout the government department. The White Home Council of Financial Advisers launched a report in April discovering that prohibiting stablecoin yield “would do very little to protect bank lending,” estimating {that a} ban would improve financial institution lending by solely 0.02%. The ABA objected to that report’s findings inside days of its launch.
Nichols despatched a separate joint letter with 52 state bankers associations to Congress in December urging lawmakers to shut the yield loophole, and the ABA joined those self same teams in the same letter to the OCC in April.
The Senate Banking Committee markup on Could 14 represents a crucial procedural hurdle for the Readability Act. Even when the invoice clears the committee, it nonetheless requires 60 votes on the Senate ground, reconciliation with the Senate Agriculture Committee’s model, alignment with the Home-passed invoice from July 2025, and a presidential signature.
The White Home has set a July 4 goal for the invoice’s passage.
