Hawley Becomes First Republican to Oppose CLARITY Act

Senator Josh Hawley (R-MO) said Wednesday he will vote against advancing the CLARITY Act unless lawmakers strengthen protections for community banks, making him the first Republican to publicly oppose the bill.

Hawley told Politico that farmers, ranchers, and community bankers in Missouri are flooding his office with concerns that stablecoin rewards programs could pull deposits away from local banks and cut off agricultural lending in small towns.

“I’m going to vote with my state on this,” Hawley said. “My state right now – agriculture folks, local community people – are very, very worried about the effect on community banks. They are blowing me up over it.”

Banking groups want the bill to include stronger restrictions on crypto rewards programs, arguing they function like interest on deposits and could trigger deposit flight from traditional checking and savings accounts. Crypto firms say the banks are trying to ban competition.

The bill is already short of the 60 votes needed, and Hawley’s opposition leaves supporters with an even narrower path to passage. Senator Rand Paul (R-KY) is expected to oppose the bill as well. Seven Democratic negotiators said the July 22 draft fell short on ethics, and talks over restricting senior officials from crypto dealings stalled.