Six banking groups are lobbying hard against the CLARITY Act.
They call it a financial stability risk, while the real reason is business and profits.
Customer deposits fund around 80% of US bank lending.
This is the cheap and easy access to capital banks have.
@ABABankers' own filing against CLARITY act agrees that this could cut consumer, small-business, and agricultural lending by a fifth or more.
In response, Senate Banking Committee added 31 pages through the Tillis-Alsobrooks compromise, which restricts deposit-equivalent yield while permitting activity-based rewards.
But banks are still against it and face a trade-off.
Will they defend their deposit base at the cost of letting Americans earn better yield?
Or will they choose progress over protectionism?
Lobbying like this has slowed new financial infrastructure before, but it has been built anyway.
Whatever is the case, if passed, this regulation will define crypto market structure for decades to come.
I picked the regulated and compliant path for my company four years ago, anticipating this moment.