Banks and state attorneys general challenge CLARITY Act ahead of Sept. 15 Senate vote

Eight banking associations and 17 state attorneys general have challenged parts of the CLARITY Act ahead of a Sep. 15 procedural Senate vote requiring 60 votes to proceed ^[1].

Banks are urging senators to tighten proposed stablecoin reward restrictions before the CLARITY Act vote, arguing that stablecoin rewards tied to balances or holding periods could operate like deposit interest ^[2].

The banking coalition also criticized the proposed deposit-flight circuit breaker, arguing regulators may act too late if outflows reach a threshold ^[2].

A separate report says eight major U.S. banking institutions warned the final draft of the CLARITY Act does not adequately regulate stablecoins, and argued that the “circuit breaker” mechanism is not a true safety measure ^[3].

Another report similarly characterizes the dispute as involving banks and state authorities, saying the two groups had distinct issues including stablecoin rewards and bank deposits, in the run-up to the Sept. 15 Senate vote ^[4].