As Congress considers legislation to create a regulatory framework for digital assets, there remain areas of the bill that could be strengthened, particularly when it comes to closing the payment of interest loophole for payment stablecoins, the American Bankers Association’s Brooke Ybarra told Bloomberg TV today.
The Senate Banking Committee last week advanced the Clarity Act by a bipartisan vote. ABA and others have urged lawmakers to use the bill to close a loophole that allows digital asset service providers to bypass the Genius Act’s ban on paying interest or yield on payment stablecoins.
Ybarra – who is SVP for innovation and strategy at ABA – told Bloomberg there remains too much ambiguity in the current text of the Clarity Act on whether it closes the loophole.
“You have a prohibition with two prongs ‘solely’ in connection with holding a payment stablecoin,” she said. “The use of the word ‘solely’ there is extremely constricting, and it is pretty easy to imagine how one would design a program with some other de minimis requirement that, all of a sudden, this (interest or yield) payment is no longer made in connection with holding a payment stablecoin.”
The bill also would establish an economic or functional equivalence test for making that determination, but different people have looked at the bill and come away with different conclusions on the types of payments that would be allowed, Ybarra said.
“It’s just a handful of words that we are seeking to have changed to just try to make that a little more clear,” she said.
