Lummis Wants Banks to Embrace Stablecoins, CLARITY Act Stalls
Billionaires managing multi-trillion-dollar portfolios are bullish on a future that is tokenized. They expect real estate, bonds, currencies, and pretty much everything of value to float on public ledgers like Ethereum and Solana in the coming months.
Tokenization of fiat, like the USD and Euro, has been a huge success. As of February 6, over $308Bn of stablecoins, most of them tracking the greenback, are in circulation on Ethereum and other popular smart contract platforms.
(Source: Coingecko)
Given this success and first-mover advantage, especially that of the USD, it is not surprising that Senator Cynthia Lummis of Wyoming wants traditional banks in the US to embrace stablecoins. Her comments come even as Congress hits another roadblock on crypto regulation.
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What Are Stablecoins and Why Is Lummis Talking to Banks?
This call comes at a pivotal period for some of the best cryptos to buy, with Bitcoin plummeting as traders wait for regulatory clarity. Zoom out, and this fits a bigger pattern: lawmakers argue over rules while stablecoins keep spreading into everyday finance. That gap between policy and reality matters if you are new to crypto. Stablecoins already move billions of dollars every day; banks now face a choice: join in or risk falling behind.
To understand what’s going on here, a stablecoin is a digital dollar that lives on a blockchain. Think of it like a prepaid debit card where one token equals one dollar. This peg ensures the stablecoin is, as the name suggests, “stable” without wild price swings. Popular stablecoins include USDC and USDT, which together make up over +60% of the total stablecoin market share.
Speaking on Fox Business, Lummis argued that while political friction persists, the technological necessity for “faster payments and cheaper transfers” has reached a breaking point. She said stablecoins give banks a whole new product to offer customers and are not a threat to the banking system, but rather the next logical evolution of the dollar itself.
“The current system is antiquated. Sending money today still feels slow and expensive because it is. Stablecoins give banks a whole new product to offer: instant, 24/7 settlement that doesn’t rely on the legacy pipes of the 1970s.”
Her vision is one where local banks act as the primary issuers or custodians of these digital dollars. By doing so, she argues, the US can solidify the dollar’s dominance globally while providing domestic consumers with the friction-free financial experience they already enjoy in other digital sectors.
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The CLARITY Act Debate
This debate ties directly to the stalled CLARITY Act, a bill meant to define who regulates crypto in the US. Talks recently froze, adding to the broader CLARITY Act collapse. Banks pushed back, warning that stablecoin rewards could pull money out of savings accounts. However, digging deeper, the primary cause of the current CLARITY Act collapse is a fear over “yield.”
Traditional banks currently hold trillions in user deposits. They loan out these deposits at a higher rate while offering savings yields close to zero. Brian Moynihan of Bank of America warned Congress that if stablecoin issuers are permitted to pay interest or “rewards” to users, the flight of capital could be staggering. Because most stablecoins are backed by high-yield US Treasuries, issuers can theoretically pass a 4–5% yield to holders. This far outstrips the 0.01% to 0.40% interest rates found in most standard checking and savings accounts.
BANK OF AMERICA CEO SAYS UP TO $6T COULD MIGRATE FROM U.S. BANKING SYSTEM INTO STABLECOINS IF INTEREST-BEARING STABLECOINS ARE ALLOWED
— The Wolf Of All Streets (@scottmelker) January 15, 2026
The American Bankers Association (ABA) also argues that if capital leaves, the capacity for banks to issue mortgages or loans will drop, possibly destabilizing the broader economy. It is this fear, a “poison pill,” that led to the revision of a key provision under the CLARITY Act that would effectively ban stablecoin yield.
While bullish for banks, many argue this will break crypto. Brian Armstrong of Coinbase publicly withdrew his support for the bill, saying that although progress has been made, banning stablecoin yield will stifle innovation. The crypto CEO suggested that, under these rules, banks would succeed in eliminating competition through legislative fiat rather than by offering superior products.
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