The banking sector continues to weaken CLARITY ActCrypto infrastructure legislation that will set the path for the US to dominate the global digital asset industry. The banking industry’s opposition to the bill is based on FUD. There is a simple solution to your fears; this is called competition. To beat crypto firms by providing a better and more valuable service to their customers. Unfortunately, banks choose a different path: a regulatory moat that will protect their businesses while further depriving the population and improving options when it comes to financial services.
Yesterday President and CEO American Bankers Association (ABA), RobNichols, He told CNBC his concerns relate to the potential impact on economic activity and local credit. While voicing his support for innovation in the United States, Nichols said that issuers of payment stablecoins should not offer returns because this would divert deposits away from banks.
Although the concern is hollow, the bill already bans stablecoin payments Since owners are denied a return, the banking industry has a simple option to reduce this possibility. Offer depositors a competitive interest rate. Of course, this could mean lower profits for banks, which is the main concern of the banking industry.
Banks are already moving into crypto, including becoming stablecoin issuers. Eventually, stablecoins will become ubiquitous because they are not actually crypto, they will update payment and transfer channels that are faster and less costly. This is good for consumers.
Since payment stablecoin issuers must hold reserves in cash or highly liquid, low-risk assets such as U.S. treasuries, it makes sense for issuers to offer returns to their holders. Unfortunately, this was banned to silence the Sisyphean voices coming from the banking industry to the detriment of the consumer.
Speaking on behalf of the Senators working on the bill, Nichols explained that the purpose of the bill is to ensure that there is no economic contraction and that the bankers have the perfect solution. Unfortunately, this hinders competition.
“I think the crypto and banking industries can co-exist. I think we can be the banking capital of the world and the crypto capital of the world,” Nichols said wryly.
“We shouldn’t be creating a new regulatory structure that takes money from local loans,” Nichols added, without a shred of evidence.
What the Senate needs to do is craft legislation that protects consumers, enables innovation, and promotes competition, including for deposits. What bankers want is a bill that protects their profits. It’s that simple.
