Why the CLARITY Act is so important for stablecoin customers & issuers

A coalition of 78 banking groups led by the American Bankers Association urged Congress to tighten the CLARITY Act's stablecoin reward rules, saying Section 404's ban on returns paid "solely" for holding stablecoins leaves a loophole. Banks argue platform-paid rewards turn stablecoins into deposit substitutes; issuers like Circle and Paxos would find yield-like incentives harder to offer.