ICYMI: Congress Should Act to Advance New Technologies, Not Bankrupt Main Street

Yesterday, the Washington Examiner published a new op-ed from The Ledger Project spokesperson Mattie Duppler. In the piece, she makes the case that Congress can support digital asset innovation without hurting small business and communities or weakening consumer trust in the financial system.

As Congress considers the CLARITY Act, lawmakers must address stablecoin yield—a loophole that could blur the line between payment products and bank accounts, expose consumers to unfamiliar risks, and pull funding away from the institutions that support Main Street lending.

As Mattie put it: "[T]here is a big difference between setting new rules for novel payment technologies and opening the back door for crypto firms to become banks. That line is crossed when the crypto world is given the ability to offer what are effectively interest-bearing savings accounts."

Here are the highlights:

Stablecoins may improve payments, but stablecoin yield raises a different set of risks.

• "A consumer who moves money onto a crypto platform because it offers an attractive interest payment may not realize that the product does not come with the same guarantees around federal insurance, access to funds, dispute resolution, disclosures, or regulatory oversight."
  
  

Deposit flight could weaken Main Street lending.

• "If stablecoin platforms induce billions of dollars to flow out of savings accounts to instruments outside the traditional regulatory framework, those funds won’t flow back into local lending."
  

Congress should establish fair rules for the entire financial system.

• "The best version of digital asset legislation would close the yield loophole and allow stablecoins to develop as payment instruments without letting interest-like payments blur the line between a payment product, an investment product, and a bank account."
  
  

Congress should use CLARITY to protect consumers, give innovators clear rules, and prevent regulatory loopholes from weakening the flow of credit to Main Street.

Read Mattie's full op-ed in the Washington Examiner op-ed here.

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