US community banks launch ad campaign against stablecoin rewards

A lobbying group representing small and medium-sized regional banks in the U.S. has launched a public advertising campaign to block certain provisions in a stablecoin bill being advanced in the Senate. The campaign aims to reverse a proposed easing of regulations on 'rewards,' a change influenced by the crypto industry that would allow for indirect interest payments to stablecoin holders. According to The Block, the Independent Community Bankers of America (ICBA) announced in a statement that its new campaign targets a compromise provision within the Clarity Act, which is under review by the Senate Banking Committee. Traditional banks fear that allowing users to deposit stablecoins and earn rewards could lead to a mass exodus of retail deposits from the banking system into the crypto market, destabilizing regional finance.