Citigroup CEO Hopes CLARITY Act Passes Despite Stablecoin Incentive Concerns

Jane Fraser supports CLARITY Act passage but warns stablecoin deposit rewards could drain bank deposits, weakening lending capacity. The bill currently bans holding rewards but permits transaction incentives.

Woofun AI reports that Citigroup CEO Jane Fraser expressed hope for the eventual passage of the CLARITY Act, viewing it as beneficial for the financial system, while maintaining concerns regarding stablecoin incentive structures. Fraser noted that Citi continues to work on refining the legislation. She argued that if stablecoin platforms provide rewards for user deposits, it may cause a decline in traditional bank deposits, thereby reducing banks' capacity to offer lending and credit services in specific U.S. regions. The current bill prohibits rewards for merely holding stablecoins but permits incentives for transactions and payment activities. This distinction remains central to the ongoing dispute between the banking and crypto industries as the legislation progresses.