SDBA Grassroots Action Alert

Your Voice is Needed: Protect Bank Deposits. Close the Stablecoin Loophole.

Community banks depend on deposits to fund the loans that keep our communities moving. As Congress considers the CLARITY Act, we need to make sure new digital-asset regulations don't unintentionally undermine that foundation.

We are asking South Dakota bankers to contact Senators Thune and Rounds and urge them to close the stablecoin loophole—ensuring stablecoins cannot be used to offer interest-like payments or incentives simply for holding them.

This is a targeted request, not opposition to responsible digital-asset regulation. We support clear rules of the road; we simply need those rules to preserve a level playing field and protect the deposits that support lending in our communities.

Why This Matters

The CLARITY Act is intended to establish a regulatory framework for digital assets. SDBA supports responsible regulation that provides clarity and protects consumers and the financial system.

However, the bill must not create a back door for stablecoin issuers or third-party platforms to offer interest-like payments or other incentives on stablecoin holdings.

Bank deposits are the foundation of lending in our communities. Deposits provide the funding that allows community banks to make mortgages, agricultural loans, small-business loans and other credit available to South Dakotans.

If stablecoin platforms can compete directly for those deposits by offering rewards that function like interest, the consequences extend well beyond the banking industry. It could shift funds away from the banking system and reduce the deposits available to support lending in our communities.

Banking organizations have urged Congress to strengthen the CLARITY Act's protections against these unintended loopholes while preserving legitimate rewards tied to actual transactions and activities.

What We Need From You

Please take a few minutes to contact Senators John Thune and Mike Rounds and ask them to support closing the stablecoin loophole in the CLARITY Act.

Specifically, ask them to ensure the legislation clearly prohibits interest-like payments, yield or other incentives for simply holding stablecoins—while preserving legitimate rewards tied to transactions.

CALL TO ACTION:

Contact Senator John Thune

Contact Senator Mike Rounds (This link will lead you to a landing page to contact Senator Rounds. In the dropdown options, select the first option, "Share your opinions or comment on legislation or issues." to be taken to the email form.)

Your voice matters. Senators need to hear directly from the community bankers whose deposits fund lending to families, farmers, ranchers and small businesses across South Dakota.

Make It Personal
When contacting your senators, consider sharing:

How your bank's deposits support lending in your community.
The importance of deposits to your bank's ability to serve local customers.
Why allowing stablecoin platforms to compete for deposits could affect your community.
Why you support responsible digital-asset regulation but believe this loophole should be closed.

Sample Email to Copy & Paste

Subject Line: Urge Congress to Close the Stablecoin Loophole in the CLARITY Act

Dear Senator,

As a community banker serving South Dakota, I encourage you to support efforts to close the stablecoin loophole in the CLARITY Act.

I support establishing a clear and responsible regulatory framework for digital assets. However, the legislation should not allow stablecoin issuers or third-party platforms to offer interest-like payments, yield or other incentives simply for holding stablecoins.

Bank deposits provide the funding community banks rely on to make loans to families, farmers, ranchers and small businesses. Allowing stablecoin platforms to compete directly for those deposits could pull funds out of the banking system and ultimately reduce the credit available in communities like mine.

Please support clear language that prohibits interest-like payments or yield on stablecoin holdings while preserving legitimate rewards tied to actual transactions and activities.

Thank you for your consideration and for your continued support of South Dakota's community banks and the communities we serve.

Sincerely,

[Your Name]
[Bank Name]
[City]