American Bankers Association (ABA) CEO Rob Nichols made a surprise announcement on Sunday letter to every bank CEO in the country, calling for “urgent action” against what he called stablecoin derivatives in the Digital Asset Market Clarity Act, just days before the Senate Banking Committee’s hearing on Thursday.
The letter, dated May 11 – Mother’s Day – and sent to bank executives who are members of the ABA, asked bank leaders to contact their senators and encourage their staff to do the same before the committee meets for a May 14 hearing on the bill.
“I am working hard to inform every bank leader in the country about the lobbying campaign that is needed to start a conversation with them,” Nichols wrote, according to the letter. He warned that, without further changes, “we believe that the current proposals will unnecessarily encourage the flight of bank deposits to stablecoins, putting economic growth and financial stability at risk”.
CLARITY voting has recently taken place
The ABA’s sudden arrival came hours after the Senate Banking Committee on Friday announced plans identifying HR 3633, the Digital Asset Market Clarity Act of 2025 – a bill that would establish a regulatory framework for digital assets, resolve ongoing disputes between the SEC and CFTC, and establish rules for trading in crypto markets.
The timing of the letter prompted backlash from Coinbase Chief Legal Officer Paul Grewal, who wrote on X that the ABA’s alarm bells had been misplaced. “Maybe the CEO didn’t hear the message from the people in the WH room after the meeting,” Grewal wrote. “We have already made an ‘immediate engagement.’ You have killed the ‘useless crop’. I know because I was there – you weren’t. Take yes for an answer. Go ahead. Stop wasting the time of the Senate and the American people. “
Sen. Bernie Moreno, a member of the Senate Banking Committee, blasted the ABA on television. postsaying that the “banking community is in complete panic” and accusing lawmakers of misleading lawmakers by labeling the stablecoin’s yield as “shit” – a statement he said was an insult to the bipartisan work that had already been done during the GENIUS Act.
Moreno said he would vote to advance the Clarity Act on Thursday, declaring: “Innovation, freedom, and the American people have won.
Articles by Grewal and Moreno are cited months of discussion which included at least three sessions of the White House meeting between representatives of the crypto industry and banking business groups aimed at resolving the stablecoin debate.
The discussion produced a compromisenegotiations with Sens. Thom Tillis (RN.C.) and Angela Alsobrooks (D-MD.), which prohibits the partial harvesting of stablecoin banks while allowing for some nominal rewards. The ABA and its banking affiliates say the framework doesn’t go far enough.
Speaking at Consensus Miami on May 7, Grewal said he agrees with the current situation as “good” and described the ongoing criticism of the banks as sour grapes in a battle he had already won.
Patrick Witt, who hosted the White House stablecoin meetings in February, he said he invited Nichols and other bank CEOs to join them – and they refused.
Banking companies are failing to embrace crypto
The banking industry has argued for months that even a modest yield of stablecoins — especially when they are exchanged with third-party platforms rather than directly issued — could lead to large outflows for insured banks.
A shared reality paper released by the ABA, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America cited a Treasury Department report that estimates that stablecoins could generate $6.6 trillion in deposit outflows if yields are allowed.
The figure is facing a push from the main branch. White House Council of Economic Advisers release A report in April found that banning stablecoin yields “would do very little to protect bank lending,” estimating that the ban would increase bank lending by only 0.02%. The ABA disputed the report’s findings within days of its release.
Nichols sent a joint letter to 52 state banking associations to Congress in December urging lawmakers to cap the yield, and the ABA joined the same groups in a similar letter to the OCC in April.
The Senate Banking Committee’s hearing on May 14 represents a major challenge to the Clarity Act. Even if the bill clears the committee, it still needs 60 votes in the Senate, approval by the Senate Agriculture Committee, approval by the House as of July 2025, and the President’s signature.
The White House has set a July 4 deadline for the resolution to pass.
