Senator Lummis Pushes Banks to Embrace Stablecoins Amid Crypto Bill Delay

Highlights:

• Senator Lummis urges American banks to embrace stablecoins for novel financial products.
• The CLARITY Act is delayed because of resistance to stablecoin yield provisions.
• Stablecoins would provide banks with a new source of income and attract more customers.

Senator Cynthia Lummis, a key advocate for stablecoins, has encouraged U.S. banks to embrace the digital asset. She believes that stablecoins represent an entirely new financial product that may benefit banks and their customers alike. However, the crypto legislation is encountering major setbacks, especially the CLARITY Act. The bill that would regulate crypto in the U.S. is stalled as stakeholders discuss the role of stablecoins within the banking system.

Lummis, as the chair of the Subcommittee on Digital Assets, emphasized that stablecoins are not a threat to the traditional banks but an evolution in the U.S. dollar itself. In a recent interview with Fox Business, she pointed out that stablecoins would provide a new source of revenue to banks as a result of digital asset custody offerings. She also urged banks to see these digital assets as a chance and not a threat, as they can speed up payments and lower transaction costs to consumers.

Digital assets are the future of financial services.

We are putting strong safeguards in place to ensure their seamless integration, making life easier and more affordable for the American people. pic.twitter.com/5tI0SqCb5M

— Senator Cynthia Lummis (@SenLummis) February 6, 2026

Stablecoins and Their Potential to Revitalize Banking

The banking sector has been resistant to these digital assets despite the push of Senator Lummis, especially in terms of “yield” rewards. There is concern that the interest on the digital asset might draw deposits out of traditional accounts. This has raised concerns among banks, and particularly community banks that are so dependent on stable deposits for lending.

However, Lummis suggests that this objection overlooks the bigger picture of the positive aspects of stablecoins. She noted that stablecoins would allow more efficient and quicker domestic and international payments. This would not only be helpful to the consumers but would also increase the services that banks could offer, including cross-border payments and custodianship of digital assets. Lummis argues that these digital assets have the potential to transform the financial environment by enhancing accessibility and efficiency.

CLARITY Act Faces Roadblocks Amid Banking Pushback

The CLARITY Act, which aims to create a transparent regulatory framework for cryptocurrencies in the U.S., has stalled in Congress on a dispute over stablecoins. One of the major points of contention is whether to allow or deny crypto platforms to offer yield on stablecoin deposits. Several senators have raised concerns that this may weaken the traditional banking system, especially in smaller communities.

For instance, the American Bankers Association (ABA) has expressed strong opposition. The ABA has made stablecoin oversight a priority in its 2026 policy agenda. They also cautioned that these rewards would result in loss of deposit funds. Should this occur, banks would not be able to provide loans and mortgages, which could destabilize the broader economy. Moreover, crypto firms, such as Coinbase, have withdrawn their endorsements of the bill.

🚨 The American Bankers Association (ABA) has declared banning yields on payment stablecoins its number-one priority for 2026.

— Cryptolenz (@CryptobuddyInfo) January 23, 2026

Lummis, however, maintained that the opposition to stablecoins is misplaced. She does not consider digital assets a threat but a natural evolution of the U.S. dollar. Additionally, she believes the benefits of adopting stablecoins far outweigh the risks involved, particularly when other nations are still experimenting with digital assets within their financial systems.

Meanwhile, the U.S. dollar stablecoin industry is expanding, despite the CLARITY Act remaining stalled. Treasury Secretary Bessent recently stated that with appropriate regulatory support, the stablecoin market might exceed $2 trillion by 2028. However, the development of stablecoins in the U.S. may be highly impeded without a proper legislative framework.