Citigroup CEO: Hopes for CLARITY Act to Ultimately Pass, But Still Concerned About Stablecoin Incentive Mechanism

August 14th, Citigroup CEO Jane Fraser stated that, despite concerns about how the CLARITY Act handles the stablecoin reward mechanism, she overall hopes the bill can be passed and believes it will benefit the financial system. Fraser said Citigroup is still working to improve the bill.

Fraser pointed out that if stablecoin platforms could offer rewards for user deposits, it could lead to a loss of traditional bank deposits, thereby weakening banks' ability to provide loans and credit services to certain regions of the United States. Currently, the bill stipulates that platforms cannot offer rewards solely for holding stablecoins but can provide rewards for transaction and payment activities. This issue remains a core point of contention between the banking sector and the crypto industry in the bill's advancement process.