Clarity Act stablecoin yield fight: ABA warns $1.7T deposit risk

Ahead of the US Senate Banking Committee vote, the American Bankers Association (ABA) is lobbying against parts of the **Clarity Act** that could allow **yield-bearing stablecoins**. ABA says the updated rules could trigger a stablecoin expansion of up to **$1.7T**, potentially shifting money away from **insured bank deposits** and weakening mortgage and business lending funding. ABA President Rob Nichols urged banks to contact senators, arguing the draft still leaves room for crypto firms to offer yield incentives. The dispute centers on whether “**stablecoin yield**” would effectively substitute for bank deposit interest. Crypto and fintech supporters push back, including Ohio Senator Bernie Moreno, who calls the process politically driven. The legislative timeline is tight: the Committee is expected to release updated **Clarity Act** text on Monday, see amendments on Tuesday, and hold a Thursday vote. A prior White House Council of Economic Advisers analysis suggested stablecoins may not harm banks, but ABA’s research argues regulators are asking the wrong questions and estimates the market could grow from about **$300B to $2T** if yield incentives are permitted. For traders, the key risk is policy uncertainty around **Clarity Act** stablecoin yield rules, which can lift volatility in stablecoin liquidity and USD-pegged token sentiment.