78 banking organizations have sent a unified message to the U.S. Senate. The American Bankers Association, the Independent Community Bankers of America, and 76 state banking associations are
78 banking organizations have sent a unified message to the U.S. Senate. The American Bankers Association, the Independent Community Bankers of America, and 76 state banking associations are calling for targeted changes to Section 404 of the CLARITY Act.
Their concern is that the current stablecoin yield language may not be strong enough to prevent crypto platforms from offering interest-like rewards that draw deposits away from traditional banks.
Crypto commentator BankXRP (@BankXRP) highlighted the scope of the coalition by sharing the letter’s signatory pages. The list runs from Alabama to Wyoming and includes independent and community banking groups alongside major national bodies, and this pressure could delay the bill.
These aren't just a few voices.
The American Bankers Association, ICBA, and 76 state banking associations have united to urge the Senate to strengthen the Clarity Act's stablecoin provisions.
When this many banking groups speak together, Washington listens.
https://t.co/U8iVI6UfcXpic.twitter.com/9G3wxMoZLt
— 𝗕𝗮𝗻𝗸XRP (@BankXRP) July 14, 2026
The GENIUS Act, passed in July 2025, banned stablecoin issuers from paying interest directly to holders. That prohibition only applied to issuers. Platforms like exchanges quickly found a workaround, passing yield to users as rewards instead.
The banking associations warn that Section 404’s current language may not sufficiently deter interest-like incentives that encourage customers to hold stablecoins for extended periods rather than use them purely for transactions.
Ripple’s stablecoin RLUSD was never built around yield incentives. It grew to $1 billion in market cap just a year after launching and without offering a yield to holders.
Ripple built it for payments and settlement stablecoin from day one. Its turnover velocity is second only to Tether’s, meaning the money flowing through RLUSD is being used for transactions rather than sitting in wallets earning passive rewards.
Everything RLUSD was built for, including payments, settlement, and collateral, falls squarely in the category of permitted activities the draft still allows. Tighter guardrails hurt competitors who depend on yield to attract holders. RLUSD is already operating the way regulators want stablecoins to work.
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XRP acts as the bridge currency between RLUSD and other assets in cross-border transactions, creating utility-driven demand. The stronger RLUSD’s regulatory position becomes, the more valuable that bridge function is. The CLARITY Act would also explicitly classify XRP as a non-security, removing years of legal uncertainty that kept institutional investors on the sidelines.
The bill still has to be reconciled with the Senate Agriculture Committee’s Digital Commodity Intermediaries Act before a full Senate vote, then reconciled again with the House version. Steps remain.
But 78 banking organizations formally on record demanding stronger stablecoin guardrails is a significant development. This move could further delay the bill, which many hope will get passed before the August recess.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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