Banks Seek Ban on Stablecoin Incentives as CLARITY Markup Nears

Banking trade groups urged senators on May 8 to tighten language in the Digital Asset Market CLARITY Act of 2025 to prohibit stablecoin issuers from offering incentives to customers, while bill sponsors move the measure to a Senate Banking Committee markup scheduled for May 14.

The Consumer Bankers Association and the American Bankers Association told lawmakers the current draft includes exceptions that would allow issuers to reward users who actively use stablecoins. The groups said those carveouts could let stablecoin holdings grow at the expense of bank deposits and could be used to evade an intended ban on incentives.

Senators Thom Tillis and Angela Alsobrooks negotiated compromise language that would permit targeted rewards for active use of stablecoins, a provision intended to align certain stablecoin activities with existing bank practices and to encourage consumer adoption. The senators acknowledged disagreement with some banking industry positions while retaining the exceptions in the draft.

The Senate Banking Committee, chaired by Tim Scott, has scheduled a committee markup for May 14. Committee action will determine whether the Tillis‑Alsobrooks compromise language remains or whether lawmakers adopt tighter restrictions on issuer incentives before the bill moves forward.

Executives in the cryptocurrency industry reacted positively to the scheduled markup. Leaders at Coinbase expressed support on social media for the committee proceeding, and prediction markets showed roughly 75% odds at the time that the CLARITY Act would clear the committee.

Banking groups argue a broad exception for incentives could shift customer funds from deposit accounts into stablecoins. Crypto companies and some supporters of the bill argue limited incentives would help make stablecoins more useful for consumers and more comparable to bank products.

The markup will be the next formal test for the bill, with both banking associations and crypto firms continuing to press senators in the days before the committee vote.