"“I am reaching out to make every bank leader in this country aware of an urgent advocacy fight that requires your immediate engagement,” Nichols wrote, according to the letter. He warned that, without further changes, “we believe the current proposal would unnecessarily incentivize the flight of bank deposits into payment stablecoins, putting both economic growth and financial stability at risk”."
"The letter, dated May 11 - Mother's Day - and addressed to ABA member bank CEOs, asked bank leaders to contact their senators and mobilize their employees to do the same before the committee convenes for a scheduled May 14 executive session on the bill. The timing of the letter drew sharp public pushback from Coinbase Chief Legal Officer Paul Grewal, who posted on X that the ABA's alarm bells were misplaced."
"“Maybe the CEO didn't get the message from the people actually in the room at the WH in meeting after meeting,” Grewal wrote. “We've already had 'immediate engagement.' You got 'idle yield' killed. I know because I was there - you weren't. Take yes for an answer. Move on. Stop wasting the time of the Senate and the American people.”"
An emergency letter dated May 11 was sent to ABA member bank CEOs urging immediate engagement against a stablecoin yield loophole in the Digital Asset Market Clarity Act. The letter warned that, without changes, the proposal would incentivize the flight of bank deposits into payment stablecoins, threatening economic growth and financial stability. The outreach occurred shortly after the Senate Banking Committee announced plans to mark up H.R. 3633, a bipartisan bill intended to create a federal regulatory framework for digital assets, resolve SEC and CFTC jurisdiction questions, and set trading rules. Coinbase’s chief legal officer criticized the ABA’s alarm, claiming prior efforts already addressed the issue. A committee member responded to the ABA’s position.
#banking-regulation #stablecoins #digital-asset-legislation #senate-banking-committee #deposit-flight-risk
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