Citigroup CEO Jane Fraser backs CLARITY Act despite stablecoin concerns

Fraser told Fox Business that while Citigroup remains committed to securing improvements to the legislation, she believes a functional bill would ultimately benefit the financial system. Her stance puts Citigroup in a more pragmatic position than peers like JPMorgan Chase, where CEO Jamie Dimon has aggressively opposed the bill, arguing that current stablecoin reward structures mirror interest payments without equivalent regulatory oversight.

The core of the industry's anxiety lies in the potential for stablecoin incentives to siphon deposits away from traditional banks. These institutions rely on those funds to finance community lending and credit access in regions often ignored by digital asset platforms. Banking trade groups, including the American Bankers Association, have warned that even activity-based rewards could function as de facto interest, potentially destabilizing the deposit base used for mortgages and business loans.

Legislators Thom Tillis and Angela Alsobrooks have attempted to bridge the divide by drafting compromise language that prohibits passive yield while permitting incentives linked to specific payment transactions. However, this middle ground has failed to satisfy the broader banking lobby, which maintains that the current provisions remain insufficient to protect against deposit flight. With a Senate cloture vote scheduled for September 15, the debate over whether these rewards constitute fair competition or an existential threat to community banking remains the final hurdle for the bill.