American Bankers Association (ABA) CEO Rob Nichols sent a state of emergency on Sunday letter to every bank CEO in the country, urging “immediate engagement” against what he called a stablecoin yield loophole in the Digital Asset Market Clarity Act, days before the Senate Banking Committee is scheduled to take action on Thursday.
The letter, dated May 11 — Mother’s Day — and addressed to the CEOs of ABA member banks, asked bank leaders to contact their senators and mobilize their staffs to do the same before the committee meets in executive session scheduled for May 14 on the bill.
“I am reaching out to make every bank president 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 will unnecessarily stimulate the flight of bank deposits into payment stablecoins, putting economic growth and financial stability at risk.”
A vote on the Clarity Act looms
The ABA’s emergency outreach came hours after the Senate Banking Committee convened on Friday Announced plans To code HR 3633, the Digital Asset Market Clarity Act of 2025 – a bipartisan bill that would create a comprehensive federal regulatory framework for digital assets, resolve longstanding jurisdictional issues between the SEC and CFTC, and establish trading rules for cryptocurrency markets.
The timing of the letter sparked sharp public opposition from Paul Grewal, chief legal officer at Coinbase, who posted on X that the ABA’s alarm bells were misplaced. “The CEO may not have gotten the message from the people actually in the room at the WH in meeting after meeting,” Grewal wrote. We’ve already got “Instant Sharing”. You killed the Dormant Returner. I know because I was there – and you weren’t. Take yes for the answer. Go ahead. Stop wasting the time of the Senate and the American people.”
Sen. Bernie Moreno, a member of the Senate Banking Committee, responded to the American Bankers Association on social media mailSaying the “banking cartel is in a complete panic” and accusing him of deceiving lawmakers by calling stablecoin yields a “loophole” — a term he said was an insult to the bipartisan work already done during the GENIUS Act debate.
Moreno said he would vote to support the Clarity Act on Thursday, declaring: “Innovation, freedom and the American people will win.”
Publications by Grewal and Moreno are noted Months of negotiations Which included at least three sessions held by the White House between representatives of the cryptocurrency industry and banking trade groups aimed at resolving the dispute over stablecoin returns.
Those conversations produced a bargainingnegotiated by Sens. Thom Tillis (R-Md.) and Angela Albrooks (D-Md.), bans negative returns on stablecoin balances while allowing some narrowly defined rewards based on activity. The American Banking Association and its allied banking groups said this framework does not go far enough.
Speaking to the Miami Consensus on May 7, Grewal said he supported the current settlement as “decent,” and described continued opposition from the banking sector as “sour grapes” over a battle they have already largely won.
Patrick Witt, who hosted the White House meetings on stablecoin returns in February, He said He personally invited Nicholls and other banks’ commercial executives to attend – but they declined.
The failed crypto lobby in the banking industry
The banking industry has spent months arguing that even a partial return of stablecoins — especially when routed through exchanges and third-party platforms rather than directly to issuers — could lead to massive outflows of deposits from federally insured banks.
A common truth Bound Released by the ABA, the Banking Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Bankers of America, they cited a Treasury Department report estimating that stablecoins could lead to as much as $6.6 trillion in deposit outflows if yields were allowed.
This number faces opposition from within the executive authority. White House Council of Economic Advisers Released A report released in April concluded that banning stablecoin yields “would do very little to protect bank lending,” estimating that the ban would increase bank lending by just 0.02%. The ABA disputed the findings of this report within days of its release.
Nichols sent a separate joint letter with 52 state banking associations to Congress in December urging lawmakers to close the yield loophole, and the American Banking Association joined those same groups in a similar letter to the OCC in April.
The Senate Banking Committee’s May 14 mark represents a crucial procedural hurdle for the Clarity Act. Even if the bill passes committee approval, it still requires 60 votes in the Senate, alignment with the Senate Agriculture Committee’s version, alignment with the House-passed bill as of July 2025, and a presidential signature.
The White House has set a date for the bill to be passed on July 4.
