US banking groups urge Senate to strengthen stablecoin provisions in Clarity Act

US banking groups are pushing the Senate to toughen stablecoin regulations within the Clarity Act, fearing that the current version could let stablecoins replace traditional bank deposits and lead to a dangerous trend of people withdrawing funds from smaller banks. This could destabilize the banking system and threaten the financial stability of community banks. The push highlights a growing concern over the potential risks stablecoins pose to the traditional banking sector, urging lawmakers to consider stronger oversight to protect the broader financial system.