‘The Banking Cartel Is In Full Panic Mode' — Senator Bernie Moreno, Coinbase Slam Banks' Eleventh-Hour’ Change To CLARITY Act

• Ahead of the CLARITY Act’s markup on Thursday, the American Bankers Association urged U.S. bank CEOs to lobby senators to close a “stablecoin loophole.
• Grewal of Coinbase, alongside White House digital assets official Patrick Witt said the banking CEOs wouldn’t sit down and talk about stablecoin yields when invited to the negotiating table.
• ABA CEO Rob Nichols cautioned that letting stablecoin issuers offer yield-like rewards could draw deposits away from traditional banks and jeopardize financial stability.

Sen. Bernie Moreno (R-OH) on Monday called the U.S. banking lobby a "cartel” as crypto industry industry leaders from Coinbase (COIN) and White House officials pushed back against an eleventh-hour change to the CLARITY Act ahead of Thursday's expected Senate markup.

“The banking cartel is in full panic mode,” Moreno said in a post on X.  He stated major banks are panicking over stablecoins because they fear losing control over customer deposits and profits if Americans use yield-bearing digital dollars. Moreno added that banks are fighting Congress to block stablecoin innovation to maintain their financial monopoly.

Coinbase (COIN) Chief Legal Officer Paul Grewal also fired at American Bankers Association (ABA) CEO Rob Nichols on X. "Maybe the CEO didn't get the message from the people actually in the room at the WH in meeting after meeting. We've already had 'immediate engagement.' You got 'idle yield' killed. I know because I was there — you weren't," Grewal wrote. "Take yes for an answer. Move on. Stop wasting the time of the Senate and the American people."

COIN’s stock gained over 4% in afternoon trade. On Stocktwits, retail sentiment around the company remained in the ‘bullish’ zone, with chatter at ‘high’ levels over the past day.

White House digital assets official Patrick Witt also confirmed Grewal’s version of event, stating that he personally asked Nichols and other bank trade CEOs to attend administration meetings earlier this year. “They refused. I guess the White House was beneath them?” he wrote on X.

Some participants in the crypto industry were more direct. The Digital Chamber CEO, Cody Carbone, accused the banking lobby of strategic stonewalling, calling the bank’s “arrogance astounding” and its “Bad faith policymaking.”

He added, “They didn’t make this a red line during the GENIUS Act. They didn’t stop the House from advancing CLARITY. Now, days before markup, after months of saying 'we won’t negotiate,' they’re suddenly demanding 'immediate engagement.”

The Conflict On Stablecoin Yield Continues

The conflict over stablecoin yield exploded on Sunday after Nichols reportedly sent an email to all of the country’s member bank CEOs demanding “immediate engagement” on stablecoin policy, just days before the Senate Banking Committee is scheduled to mark up the CLARITY Act on Thursday.

The letter urged bankers to inundate senators with calls and emails to close what the ABA refers to as a “stablecoin loophole,” the ability for crypto firms to pay interest-like rewards on payment stablecoins. "The current proposal would unnecessarily incentivize the flight of bank deposits into payment stablecoins, putting both economic growth and financial stability at risk," warned Nichols.

The ABA said these stablecoins essentially mimic bank accounts without the regulatory costs, risking deposit flight. Thursday’s markup will decide whether the banking lobby’s pressure campaign strips stablecoin yield from the final bill.

Read also: Keel Infrastructure Closes Bitcoin Mining Chapter: Q1 Misses Estimates, But CEO Bets Big On AI Pipeline 

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