Sen. Thom Tillis (R-N.C.) defended on Monday the bipartisan compromise on stablecoin yields in the Clarity Act, deeming it a “substantially improved, consensus-based product.”
Senator Says Compromise Addresses ‘Core Concern’
Tillis addressed the banking sector’s concerns that the revised text doesn’t adequately safeguard banks against “deposit flight.”
“We have worked in good faith with all sides throughout this process to encourage compromise and to avoid letting the perfect become the enemy of the good,” Tillis, who worked with Sen. Angela Alsobrooks (D-Md.) to finalize the compromise language, said.
Tillis said the compromise prevents stablecoin rewards from resembling interest on bank deposits, addressing the “core concern” over deposit flight, while helping cryptocurrency firms offer other forms of rewards.
“The result is a substantially improved, consensus-based product,” the lawmaker said. “Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree.”
Banking Groups Not Satisfied
The post was in response to a statement released by banking groups, including the American Bankers Association, Bank Policy Institute and Consumer Bankers Association, arguing that the proposed language “falls short” of protecting bank deposits.
Pro-cryptocurrency Sen. Cynthia Lummis (R-Wyo.) said that the finalized text is the “culmination of months of hard work” to deliver a compromise and get the Clarity Act across the finish line.
Benzinga also reached out to JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co. (NYSE:WFC) for a comment.
Will The Key Bill Advance?
The compromise language states that cryptocurrency firms would be banned from offering rewards that are “economically or functionally equivalent” to deposit interest.
It also directs regulators to propose "a new series of stablecoin regulations," including the development of a new stablecoin disclosure regime and a list of permissible reward activities.
Interestingly, cryptocurrency giant Coinbase Global Inc. (NASDAQ:COIN), which withdrew its support for the key cryptocurrency legislation in January, is now backing the advancement.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock/vinnstock
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