CLARITY Act debate over stablecoin rewards and state enforcement

CoinGape reports that eight banking groups are seeking changes to the CLARITY Act over concerns about stablecoin rewards and bank deposits. Crypto.news reports that 17 state attorneys general, led by New York AG Letitia James, urge rejection, warning the bill could weaken states’ authority to pursue crypto scams and enforce securities and commodities laws.

CoinGape says White House Crypto Council Director Patrick Witt backs Section 404, which would limit interest-like stablecoin rewards while giving Treasury a potential “circuit breaker” if community-bank deposits decline.

CoinDesk reports that Witt calls bank “deposit flight” fears a myth, arguing deposits are rising. It also reports that White House analysis estimates banning stablecoin rewards would raise bank lending by 0.02%, with 76% of any gain going to large banks.