- David Solomon backs the CLARITY Act despite disputes over stablecoin rewards and ethics.
- Banks warn stablecoin rewards could drain deposits and weaken community lending channels.
- Democrats still seek stronger ethics and consumer safeguards before supporting the bill.
Goldman Sachs CEO David Solomon has backed the CLARITY Act as US senators remain divided over stablecoin rewards and ethics rules. His support gives the crypto market structure bill a major Wall Street ally while banks continue to challenge parts of the proposal.
Solomon said that he strongly supports moving the legislation forward. He said clearer market structure rules could help advance innovation in digital assets.
Stablecoin Rewards Divide Banks and Crypto Firms
Goldman Sachs CEO acknowledged that the bill was not perfect. He argued that it could create a level playing field, enhance market stability and allow digital-asset markets to develop appropriately.
His position differs from that of JPMorgan CEO Jamie Dimon and major banking groups. They oppose the bills current stablecoin-reward provisions.
Banks argue that transaction-based rewards could draw deposits away from regulated lenders. They warn that outflows could weaken community-bank funding and reduce credit for small businesses and agricultural borrowers.
The Senate draft bans interest-like rewards on idle stablecoin balances. It still permits rewards linked to transaction-based activity, including payments.
Crypto companies argue that a wider ban on third-party rewards would be anti-competitive. Banking groups say the distinction could allow stablecoin platforms to compete with deposits under different rules.
The United States Hispanic Chamber of Commerce raised similar concerns in a letter to Senate leaders. It warned that deposit migration could affect small-business lending, community development and economic opportunities in Hispanic communities.
The chamber said community banks play an important role in financing Hispanic-owned companies and underserved areas. It urged lawmakers to limit the risk of funds moving from insured banks to digital-asset platforms.
Democratic Support Remains Uncertain
Senate Republicans released updated bill language on July 22. Several Democratic negotiators said the proposal still required changes to its ethics, consumer-protection, illicit-finance, conflict-of-interest and market-integrity provisions.
Republicans need Democratic support to overcome the Senates 60-vote procedural threshold. Reuters reported that the CLARITY Act would require at least eight Democratic votes to advance.
The CLARITY Act would clarify the respective roles of the SEC and CFTC. It would also create rules for digital-asset intermediaries, trading platforms and certain token transactions.