Community bank group launches new ad campaign targeting Clarity Act stablecoin reward language

A key group representing small to mid-sized community banks plans to launch a new ad warning of risks in digital assets, reigniting an ongoing fight between banks and the cryptocurrency industry over language within sweeping digital asset legislation.

The Independent Community Bankers of America unveiled the campaign and ad on Thursday, pushing back against compromised language in the Clarity Act that would govern the treatment of stablecoin rewards. 

“Community banks are the backbone of Main Street,” said ICBA President and CEO Rebeca Romero Rainey in a statement. “Americans care about their local economies, but most are unaware of the risks of giving crypto conglomerates a free pass.”

Over the past year, the Senate has been working to pass the Clarity Act — a broad bill that seeks to regulate the crypto industry for the first time at the federal level. It has hit multiple hurdles, including the treatment of stablecoin rewards, which allow users to earn interest on deposited funds. 

Banks, including ICBA, have said they are concerned that rewards will draw deposits away from traditional banks, while crypto firms say that restricting those rewards would hamper innovation.

After months of consternation, bipartisan language was adopted in the Senate Banking Committee that blocks certain firms from paying any form of interest for just holding stablecoins, or in any manner "economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit," but allows rewards based on certain activities.  

The Senate Banking Committee advanced its version of the Clarity Act in May, and it would next have to go to a full Senate floor vote. 

In the new ad, the ICBA criticizes the crypto industry for getting a "free pass." 

"American families don’t want experiments with their money," according to the ad transcript. "They want jobs, growth, and available credit. When crypto gets a free pass, communities pay the price.”

The Digital Chamber CEO, Cody Carbone, criticized ICBA's new campaign.

"ICBA's campaign isn't about protecting Main Street, it's about shielding an outdated model from competition," Carbone said in a statement. "The 'free pass' claim is flatly false: our industry is fighting for clear federal rules through the Clarity Act, while ICBA is fighting to keep Americans locked out of innovation."

In a statement, Blockchain Association CEO Summer Mersinger pushed back as well, citing the new language in the Clarity Act on stablecoin rewards.

“ICBA is right that American families care about their local economies,” Mersinger added. “That's exactly why they deserve access to digital payment tools operating under the clear federal rules the Clarity Act would establish. What they don't need is their community bank trade association running an expensive ad campaign to block legislation that would protect consumers and bring crypto fully into the regulatory perimeter for the first time.”

Updated at 7:20 p.m. UTC time to include comments