America's biggest banking lobby is making a last-minute push to block stablecoin reward provisions

America’s biggest banking lobby, ABA, is making a desperate attempt to change a crypto bill just days before a key Senate vote.

The head of the American Bankers Association, Rob Nichols, sent a letter late Sunday night to bank executives across the country. He asked them to call their senators before Thursday.

He stated in the letter that it was “urgent advocacy fight that requires your immediate engagement”. He warned that if the bill got the green light, the money would drain out of the traditional banks into the crypto world.

Nichols said the bill fails to stop crypto companies from offering what he called “interest-like rewards” on stablecoins, digital currencies tied to the value of regular money.

“Without additional changes, we believe the current proposal would unnecessarily incentivize the flight of bank deposits into payment stablecoins, putting both economic growth and financial stability at risk,” he wrote, while also acknowledging that the ABA does support putting some form of crypto rules in place.

The Senate Banking Committee is scheduled to hold a markup session on Thursday, May 14, at 10:30 a.m. ET on the Digital Asset Market CLARITY Act of 2025.

If passed, the bill would be the first law to set up a full federal system for regulating the crypto industry. SEC and CFTC will split the oversight to mainly decide which digital tokens are securities and which fall in commodities.

Last year in July, the House already passed its own version of the bill 294 to 134. The Senate version will still need to be aligned with separate language from the Senate Agriculture Committee before it can go to a full floor vote.

This is not the first time the bill has come close. The committee had planned a markup back in January. However, it was called off at the last moment because Coinbase, one of the biggest crypto exchanges in the country, backed out over concerns about how stablecoin rewards would be treated.

A compromise that satisfied Coinbase but not the banks

After months of talks between lawmakers, the White House, crypto firms, and banking groups, Senators Angela Alsobrooks of Maryland and Thom Tillis of North Carolina put forward a compromise on May 2.

Their language bans “covered parties” from paying any form of interest or yield to U.S. customers just for holding stablecoins, or anything that works the same way as interest on a bank deposit. However, rewards tied to actual activity or transactions would still be allowed.

Coinbase accepted the compromise, as reported by Cryptopolitan previously. The banks did not. On May 8, a coalition of financial trade groups wrote to Banking Committee Chair Tim Scott and senior Democrat Elizabeth Warren, asking for technical changes to the language.

They said it remains unclear whether certain practices would be permitted, for example, paying a customer a fixed monthly amount for holding stablecoins, with the payment growing as the balance increases. “We are concerned that the proposed language includes exceptions that will enable evasion of the intended prohibition,” the groups wrote.

The White House hit back. Patrick Witt, the administration’s top crypto adviser, said on X that he had personally invited Nichols and other bank CEOs to meetings in February to work through the issue. “They refused,” Witt wrote. “I guess the White House was beneath them?”

Crypto markets are already voting yes

While Washington fights, markets are moving in one direction. Crypto investment products took in $857.9 million last week, the sixth straight week of inflows and the biggest haul since April 24.

Bitcoin climbed past $80,000 on Monday, its highest point since February. Total assets under management in the space hit $160 billion. U.S. investors led with $776.6 million in inflows, up sharply from $47.5 million the week before. Bitcoin alone drew $706.1 million, bringing its year-to-date total to $4.9 billion.

Bets against Bitcoin saw $14.4 million in outflows, the most this year, suggesting traders are growing more confident the rally holds. Ethereum pulled in $77.1 million, reversing the prior week’s $81.6 million in outflows, while Solana and XRP brought in $47.6 million and $39.6 million, respectively.

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