American Bankers Association CEO Rob Nichols has said the banking lobby wants the Clarity Act to succeed — but small changes still need to be made to the bill.
Talking further CNBC’s Squawk Box Show Wednesday, Nichols said that while there is “a lot of good” in the Clarity Act, the issue surrounding stablecoins and local lending needs to be addressed.
A number of lawmakers are hoping that the Clarity Act – which would set a stone for crypto regulation in the US – will be passed before Congress leaves for the August recess. But one problem with the bill has been related to concerns bank executives have over the stablecoin dividend.
“The bill is about 600 pages, and there are only two sections where we propose small surgical edits,” Nichols said.
“I think the crypto and banking sectors can co-exist. I think we can be the crypto capital of the world and I think we can be the banking capital of the world.”
The bill was passed last year by the House of Representatives, but has been deadlocked after bank executives raised concerns about stablecoins and the dividends they would potentially pay customers.
America’s largest crypto exchange, Coinbase, pulled support for the bill in January after clashing with bank executives who said it should be banned from earning returns on stablecoins.
US banks have said they may lose customers if crypto exchanges offer more attractive products to their depositor base.
Coinbase’s Chief Policy Officer, Faryar Shirzad, this week shrugged off the concerns of the banking lobby, claiming that top lenders are already adopting crypto technology.
Top US banks – including JP Morgan and Bank of America – have expressed interest or have already begun debuting stablecoin products that run on blockchain technology.
A new draft circulated last week bans government officials and their families from issuing or promoting crypto — something opposition lawmakers previously took issue with.
GOP lawmakers are pushing Democrats to pass the bill. Bipartisan support for the bill exists, although some lawmakers — such as Sen. Elizabeth Warren — have criticized the draft, arguing that it would allow President Donald Trump to make money from crypto, as well as benefit criminals.
Major institutions including Fidelity and Goldman Sachs, as well as crypto lobby groups and politicians, have said the revised bill works in its current format.