#CLARITYRewardDebate

I appreciate hearing that my friend @BankersPrez Rob Nichols is working to pass the CLARITY Act. But the “small” changes he wants would put significant friction on stablecoin adoption - just as stablecoins are taking hold in commerce and becoming critical infrastructure for tokenization and the digital asset economy. This would kill the bill. Rob argues that stablecoin rewards could draw bank deposits and therefore should be treated like deposit interest. But stablecoins aren’t bank deposits. The @ABABankers shouldn’t get to declare that rewards are deposit interest simply to dictate who can pay them and when. And the ABA has already won major concessions. GENIUS prohibits stablecoin issuers from paying yield. CLARITY goes further, explicitly saying rewards cannot mimic deposits and restricting platform rewards. Big banks know why rewards matter: they used them to drive credit card adoption. Now that the same tool can drive stablecoin adoption, the ABA’s biggest members want Congress to constrain it. The real issue is competition. Stablecoins bring new competition to payments and money movement, where the largest banks enjoy enormous scale and incumbent advantages. And there’s an irony in invoking community banks to protect that incumbency. Smaller banks can use stablecoin rails to compete with mega banks too. The ABA shouldn’t use its smaller members as a shield to protect its biggest ones. The “deposit flight” claim has been repeatedly contradicted by the evidence. This is about blunting competition - even from the ABA’s own smaller members. Congress has gone a long way to address the ABA’s concerns. The CLARITY compromise is a win for its members - as are the multiple new powers CLARITY gives banks to participate in digital assets. They should take the win. And the ultimate irony: kill CLARITY and you don’t get tougher restrictions on rewards. You get no new restrictions at all. It’s time to pass the bill.