ABA pushes Congress to fix, not kill, the Clarity Act

American Bankers Association President and CEO Rob Nichols argued in a CoinDesk opinion piece Tuesday that Congress should strengthen the Clarity Act rather than block it. Nichols wants senators to close what he calls a loophole in the roughly 600-page bill, and he says the fix touches only two paragraphs of it.

The loophole, as Nichols describes it, lets digital asset service providers sidestep the existing ban on stablecoin interest and yield. Congress wrote that ban into the GENIUS Act to stop payment stablecoin issuers from competing directly with bank deposits. ABA wants senators to extend the same prohibition explicitly to stablecoin-issuer affiliates and to crypto exchanges, closing the gap that currently lets those entities offer yield-like rewards programs the issuers themselves cannot.

“We're working with senators just to make sure that the language that they penned can also extend to affiliates and to exchanges, so there isn't a massive dampening of economic activity. Congress's intent here is simply what we're helping them do. The bill is about 600 pages, and there are only two paragraphs that we're suggesting tiny, surgical edits.”

— Rob Nichols, President and CEO, American Bankers Association

Nichols frames the fight as a defense of local lending, not an attempt to slow crypto down. Community banks depend on their deposit base to fund loans in the towns they serve, and ABA argues that yield-bearing stablecoin products marketed as savings alternatives could pull money out of that base faster than banks can replace it. "There is a reason that they call it 'payment stablecoin' and not 'deposit stablecoin,'" Nichols has said. "Congress views this as a very important payment innovation. I share that view, but they don't view it as a deposit substitute, and the two things are different."

• Length of the Clarity Act bill: roughly 600 pages
• Portion ABA wants changed: two paragraphs, covering stablecoin yield language
• Legal basis for the fix: extending the GENIUS Act's ban on payment stablecoin interest to affiliates and exchanges
• Next procedural Senate vote on the bill: scheduled for September 15
• Same-day stock moves for Clarity Act proponents: Coinbase and Bullish rose about 8%, Circle rose nearly 10%

The op-ed lands as optimism around the bill's prospects builds again. Senate Banking Committee Chair Tim Scott, Senator Cynthia Lummis, and White House crypto adviser Patrick Witt have all signaled the delayed vote could finally move in September, and crypto-linked stocks rallied on that signal the same day Nichols published his piece. His position also echoes a broader shift among bank executives: former Barclays CEO Bob Diamond has separately argued the GENIUS Act benefits banks rather than threatening them, suggesting the industry's real fight now is over the fine print of stablecoin rules, not whether digital assets get a federal framework at all.

The bill has taken a winding path to get here. Senators delayed a vote in late July over Russia sanctions language, then again in early August, with markets briefly pricing in just 26% odds of a vote before the summer recess. New York Attorney General Letitia James warned separately that the bill as written could weaken state fraud enforcement, a concern crypto advocates dispute. Nichols positions the ABA's request as narrow by comparison: an edit to close a gap Congress already intended to close, rather than a rewrite of the bill's core structure. Whether senators treat two paragraphs as a minor fix or a fresh fight will shape how quickly the bill actually reaches a floor vote after September 15.

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