Banking Lobby CEO Talks Crypto Clarity Act as Senators Race To Pass Bill

The CEO of the American Bankers Association, Rob Nichols, has said that the banking lobby wants the Clarity Act to succeed — but small edits to the bill still need to be made.

Speaking on CNBC’s Squawk Box show Wednesday, Nichols said that while there is a “lot of good” in the Clarity Act, the issue around stablecoins and local lending needs to be fixed. 

A number of lawmakers are hoping the Clarity Act — which would set in stone crypto regulation in the U.S. — gets passed before Congress departs for August recess. But a sticking point of the bill has been related to concerns banking chiefs have over stablecoin yield. 

“The bill is about 600 pages and there’s only two paragraphs where we’re suggesting tiny surgical edits,” said Nichols. 

“I do think that the crypto and the banking sectors can coexist. I think we can be the crypto capital of the world and I think we can be the banking capital of the world.”

The bill was passed last year by the House of Representatives but has been in deadlock after banking chiefs raised concerns over stablecoins and the yield they would potentially pay customers. 

America’s biggest crypto exchange, Coinbase, pulled support for the bill in January after clashing with banking chiefs who said that earning yield on stablecoins should be banned. 

U.S. banks have said they could lose customers if crypto exchanges offer more attractive products for their deposit base. 

Coinbase’s Chief Policy Officer, Faryar Shirzad, this week shrugged off the concerns that the banking lobby has, claiming that top lenders are already adopting crypto technology.

Top U.S. banks — including JP Morgan and Bank of America — have expressed interest or already started debuting stablecoin products, which run on blockchain technology. 

A new draft circulating last week bans officials and their families from issuing or promoting crypto — something opposition lawmakers previously had issue with.

GOP lawmakers are pushing Democrats to pass the bill. Bipartisan support for the bill exists though some lawmakers — such as senator Elizabeth Warren — have criticized the draft, claiming it would allow President Donald Trump to make money from crypto, as well as benefit criminals. 

Major institutions, including Fidelity and Goldman Sachs, as well as crypto lobby groups and politicians, have said the revised bill works in its current format.