Goldman Sachs CEO Backs CLARITY Act Despite Bank Concerns Over Stablecoin Yields

Goldman Sachs CEO David Solomon has declared his support for the CLARITY Act despite banks’ opposition to stablecoin yields. This follows the release of the latest crypto bill draft text, which still faces opposition as Democrats have yet to support it.

Goldman Sachs CEO Shows Support For CLARITY Act

David Solomon told Politico that he is very supportive of moving the crypto bill forward, so that they can get some market structure in place and start to move the innovation process along. He also acknowledged that the bill is not perfect and that there are a lot of things that one could debate and argue about.

However, the Goldman Sachs CEO added that one of the most important things is that the CLARITY Act creates a level playing field to enhance market stability and allow the markets to develop appropriately. David Solomon joins Ripple and Coinbase CEOs Brad Garlinghouse and Brian Armstrong, who are also pushing for the Senate to pass the bill.

Meanwhile, his statement comes despite banks’ opposition to stablecoin yields, with the crypto bill permitting third-party crypto firms to pay activity-based rewards. Banking associations argue that this could lead to significant outflows from community banks. Key banking stakeholders such as JPMorgan CEO Jamie Dimon have also voiced out against the bill in the past.

Senate Republicans released the latest CLARITY Act draft yesterday, which still includes this provision and only bans stablecoin yields on idle balances. However, the crypto bill’s approval odds remain low as Democrats oppose the latest draft despite the inclusion of an ethics provision.

Another Group Voices Support For Banks’ Concerns

The United States Hispanic Chamber of Commerce (USHCC) sent a letter to Senate leaders earlier this week showing support for banks’ concerns that the stablecoin yield provision in the CLARITY Act could trigger outflows from community banks.

They further expressed concerns that the current draft of the crypto bill could potentially harm small business lending, community development, and economic opportunities in Hispanic communities. The USHCC also claimed that recent analyses show that these banks are also experiencing net deposit outflows related to crypto-associated activity.

It is worth noting that despite the stablecoin yield compromise earlier this year, the stablecoin yield issue is again with Republican senators John Curtis and John Cornyn saying they share banks’ concerns about deposit flight, according to Punchbowl News. Meanwhile, Republican Senator Thom Tillis said he is a no on the ethics provision.

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