Citigroup's Jane Fraser backs the CLARITY Act and wants limits on stablecoin yield rewards. A Senate procedural vote next month will test the compromise.
Citigroup Chief Executive Jane Fraser said she would welcome passage of a well-crafted version of the CLARITY Act, the digital asset market structure bill now before the Senate. In an interview on Fox Business, she said Citigroup is still seeking changes to the legislation, though a solid bill moving forward remains desirable.
The measure, formally the Digital Asset Market Clarity Act, would split digital asset oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. It also sets standards for market participants and tries to remove the legal uncertainty that has kept many institutions out of crypto. The House passed its version, and the measure has moved through Senate committee proceedings.
Fraser flagged one unresolved area: rewards tied to stablecoins. Banks worry that yield-bearing stablecoin products could draw customer deposits out of the traditional system, shrinking the funding banks have for loans. The concern is sharpest for communities that cannot rely on either big banks or crypto platforms for basic financial services.
Senators Angela Alsobrooks, a Maryland Democrat, and Thom Tillis, a North Carolina Republican, wrote a compromise into the bill. Under their language, platforms could not pay rewards simply for holding stablecoins. Incentives attached to transactions or payments would still be allowed.
Fraser said that compromise leaves her concerned about deposit bases and the ability of banks to support credit access. She said the work on improving the bill has not stopped. Enactment of a sound version, she added, would be good for the financial system as a whole.
The deposit question is the core of the banking industry's objection. Yields on stablecoin holdings give customers a reason to move money from checking accounts into crypto platforms, banks argue. In the banks' telling, when deposits leave, lenders replace them with costlier funding, and that cost shows up in loan pricing. The compromise language is the mechanism for blocking that flow. Remove it, and the deposit concerns the industry has raised are back.
Banking executives do not agree on how serious that threat is. Some have objected to the current text more forcefully than Fraser has. Others say federal rules are worth accepting even with imperfect details, because a single compliance standard would replace the patchwork of state regimes. The bill has also exposed a split between banks and crypto firms over how quickly federal rules should arrive.
The Senate returns from its recess this month. A procedural vote is expected next month. House and Senate versions still need to be reconciled before a final bill goes to the White House.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.