The Digital Chamber urges US Congress to preserve yield-generating capabilities for payment stablecoins to prevent outlawing DeFi mechanics. They petition lawmakers to retain exemptions in Section 404 of the proposed CLARITY Act. Removing these could stifle innovation and undermine dollar dominance. A ban could push capital to foreign assets, reducing USD demand.

Banking lobby warns that stablecoin yield without banking capital requirements creates arbitrage risks and destabilizes the financial system. They argue high-yield stablecoins would harm community banks. The Chamber proposes clear consumer disclosures and a federal study after two years to show stablecoins benefit traditional banking.

Negotiations on the CLARITY Act face an impasse as banking and crypto representatives clash. Wall Street lobbyists oppose non-bank stablecoin issuers passing yields to customers, fearing disruption to the traditional depository model. The Chamber’s recommendations aim to show stablecoins complement, not disrupt, the banking sector.

Read more at Yahoo Finance: CLARITY Act’s Stablecoin Yield Restrictions Could Benefit Foreign Currencies, Not USD