Citigroup's Fraser backs Clarity Act passage despite stablecoin reward concerns

Citigroup CEO Jane Fraser has thrown her weight behind the Digital Asset Market Clarity Act, telling Fox Business on August 13 that she wants "a good bill" passed, even as she continues to push for tighter restrictions on stablecoin rewards.

Fraser's concern centres on the risk that deposit-like yields on stablecoins could pull funds away from the traditional banking system, reducing banks' capacity to lend in communities that neither crypto platforms nor large institutions typically serve well.

The Alsobrooks-Tillis Compromise

The sticking point Fraser is pushing on has been one of the most contested issues in the Clarity Act's path through Congress. Earlier in the year, how to regulate stablecoin rewards came into the spotlight, and the debate quickly evolved into a broader clash between the crypto industry and the banking sector.

Senators Angela Alsobrooks (D-Md.) and Thom Tillis (R-N.C.) finalized a compromise that says platforms cannot pay rewards just for holding the asset, but that rewards could be given on transactions and payments. There is still chatter in Washington about reopening the provision, and banks are continuing to push for changes.

A joint statement from the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America argued the proposed language fell short of a true ban, citing research that yield-earning stablecoins could reduce consumer, small-business, and farm loans by 20% or more.

What Comes Next

The Clarity Act would create a regulatory framework for cryptocurrencies and other digital assets, much like the 2025 GENIUS Act did for payment stablecoins. Senators from both parties have raised concerns about the bill's potential effects on local lending if the loophole is not closed. The Senate is now in recess until September 14, with a motion to proceed scheduled for September 15.

Fraser's position reflects the broader tension facing the bill: the banking industry wants robust protections, while crypto advocates argue the compromise already strikes a workable balance. Whether the September vote moves the legislation forward will depend on how much further, if at all, lawmakers are willing to tighten the reward language before the Senate returns.

Sources:
ABA Banking Journal: Senate adjourns with no vote on Clarity Act
The Block: What's next for the Clarity Act as September brings a tough road ahead
CoinDesk: Clarity Act text lets crypto firms offer stablecoin rewards while shielding bank yield