The U.S. banking industry has stated that the Stablecoin Provision of the <i>CLARITY Act</i> still has "loopholes."

BlockBeats News, May 5th - Several major U.S. banking organizations jointly stated that despite attempts by senators to pass the "CLARITY Act" to prohibit stablecoins from earning interest, the latest wording of the bill still has loopholes that fail to effectively stop bank deposit outflows, thus inadequately protecting bank deposits.

In a joint statement released on May 5th, 2026, the American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America pointed out that Section 404 of the bill allows crypto platforms to pay users interest or rewards similar to a bank deposit outside of traditional rules, which is a "significant loophole that needs to be addressed." Banks warned that if the loophole is not closed, widespread adoption of stablecoins could lead to the outflow of trillions of dollars in deposits from the U.S. banking system (especially community banks) and could result in a reduction of consumer, small business, and agricultural loans by more than one-fifth.

Senator Thom Tillis responded by stating that the current text has reached a compromise: it both prohibits stablecoin rewards on idle balances and allows crypto platforms to offer "other forms of customer rewards," providing a possible path for bipartisan support of the bill. However, the banking industry has stated that it will submit specific amendment proposals to legislators in the coming days.

The current text of the "CLARITY Act" was made public last Friday, and the crypto industry, including Coinbase, is gearing up for a Senate vote next week.