Citi CEO Backs Clarity Act, Raises Concerns Over Stablecoin Yield Provision

Citi Chief Executive Officer Jane Fraser said she wants the Clarity Act to pass, while raising concerns about a provision that would allow some stablecoin-related yields.

The Block reported on August 13 that Fraser told Fox Business she had not given up on efforts to improve the bill.

"We haven't given up on efforts to improve the bill. I hope a good bill gets passed," Fraser said. "It would be a very positive outcome for the entire system."

The Clarity Act is awaiting a procedural vote in the Senate. A compromise put together by Democratic Senator Angela Alsobrooks and Republican Senator Thom Tillis would ban yields paid simply for holding assets, while allowing returns tied to transactions and payments.

Fraser said that provision could affect bank deposits. If deposits begin offering a yield feature, money could leave banks and weaken their ability to provide loans and credit in areas not reached by either crypto or large banks, she said.

The banking industry is split over the measure. JPMorgan Chase CEO Jamie Dimon has taken a hard line against the Clarity Act. In a Fox Business interview in May, he criticized the bill and harshly attacked Coinbase CEO Brian Armstrong.

Summer Mersinger, CEO of the Blockchain Association, said the yield provision could become a flashpoint again if the Clarity Act passes the Senate and moves to the House. She added that there had been no discussion of yield-related issues during the House's review. Republican senators are also still being pressed to choose between traditional banks and the crypto industry.