In brief
- Sen. Cynthia Lummis has urged banks to “embrace” stablecoins, calling them a faster, cheaper payment rail and “an entirely new financial product” for customers.
- CLARITY Act talks have stalled after the Senate markup was pulled, with banks pushing limits on stablecoin rewards and warning of deposit volatility.
- Treasury Secretary Bessent pressed for the bill to pass, while analysts say delays raise uncertainty as stablecoins gain “strategic significance.”
Senator Cynthia Lummis (R-WY) has urged traditional banks on Thursday to embrace stablecoins and view digital assets as a business opportunity, pushing back against banking industry opposition that has stalled crypto's flagship market structure bill.
"I'd like to see the banks embrace this rather than resist it," Lummis said during an interview with Fox Business host Maria Bartiromo, noting that stablecoins would give banks "an entirely new financial product that they can offer to their customers."
The pushback comes as negotiations over the market structure bill remain deadlocked, with banks and credit unions warning senators that stablecoin rewards could trigger deposit flight from traditional accounts, particularly at community banks that rely on stable deposits for local lending.
Digital asset analyst Nic Puckrin, co-founder of Coin Bureau, told Decrypt the ongoing delays represent "a real anticlimax" that will keep "a cap on digital asset prices before any geopolitical turbulence is factored in."
He said stablecoins have “strategic significance” amid dollar weakness, calling them a “backdoor to strengthen the dollar” even during geopolitical and macro stress.
"Whichever way the chips fall, though, it's clear stablecoins will remain a competitor to bank deposits,” Puckrin added, “Short of an outright ban on any form of rewards, there's little that can stop this."
Lummis, the chairwoman of the Subcommittee on Digital Assets, framed stablecoins as fundamentally pro-consumer technology that would make financial services "faster and cheaper" for both domestic and international transactions.
"Money can be transmitted on the blockchain more quickly than it can if you're going through existing bank structures," Lummis told Bartiromo, while pointing out that safety mechanisms developed with the Federal Reserve would protect users.
The scheduled markup cancellation of the market structure bill came just hours after Coinbase CEO Brian Armstrong abruptly withdrew support for the legislation, citing disagreements over its stablecoin yield provisions and warning the draft would be worse than the status quo.
Lummis told Bartiromo that the bank resistance targets the GENIUS Act, not the market structure bill, saying lenders want to revisit stablecoin rules to prevent products that look like “interest” or a “bank-type product.”
She added that lawmakers attempted to resolve the issue "by calling them bonuses or rewards, but we don't seem to be at a place where we can move this bill forward yet in committee."
The congresswoman pushed back on banks’ concerns, saying that stablecoins represent new revenue streams for banks through custody services, already permitted in three states, with faster payment mechanisms that compete with debit cards.
During testimony before the Senate Banking Committee on Thursday, Treasury Secretary Scott Bessent stressed to lawmakers that the CLARITY Act must pass, adding that participants who oppose it “should move to El Salvador.”
The Wyoming Senator mentioned to Bartiromo that despite losing their initial window, Senate Majority Leader John Thune has assured that floor time will be reserved for the legislation later this spring.