News

• Registration Open for 2026 #BanksNeverAskThat Campaign
• CoinDesk: Strengthen the Clarity Act
• ABA Viewpoint: The Genius Act rules are (almost) here. Here’s what banks should do
• Politico: Crypto in 'limbo'
• ABA Banking Journal: ABA voices support for updating hedge accounting standards
• CISA News: Private security firms will soon be allowed to hack overseas cybercriminals

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Registration Open for 2026 #BanksNeverAskThat Campaign

Registration is now open for ABA’s 2026 #BanksNeverAskThat campaign — giving banks free, ready-to-use resources to help customers spot scams and protect their money. This year’s campaign introduces the new Scam Slayer theme, including fresh videos, social media posts, digital graphics, printables and updated marketing and PR materials.

Register today to access the campaign tools and prepare for the official launch on Oct. 1. Then join ABA’s free webinar on Wednesday, Aug. 26, at 2 p.m. ET for a sneak peek at what’s new, the latest fraud trends and tips for making the most of the campaign.

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CoinDesk: Strengthen the Clarity Act

The American Bankers Association seeks to strengthen the Clarity Act, not kill it, argues Rob Nichols, president and CEO of the ABA.

When Senators return from their August recess, they are scheduled to consider the Clarity Act, which, if passed, would establish the first-ever, comprehensive regulatory framework around digital assets. Many in the crypto industry are eager to see it happen.

You might be surprised to learn that America’s banks are just as eager.

In the lead-up to the September vote, crypto supporters are claiming that banks are standing in the way of the Clarity Act. They are creating false narratives, trying to distract from our substantive concern with one small section of the bill and ignoring the very reasonable solution we have suggested to get the bill across the finish line.

It’s time to set the record straight.

Rob Nichols is president and CEO of the American Bankers Association.

Banks & Clarity

The American Bankers Association, which I am honored to lead and which represents banks of all sizes, seeks to strengthen the Clarity Act, not kill it. Separate concerns from law enforcement, a dispute over ethics language and a crowded Senate calendar may pose challenges to the bill, but make no mistake, we’re working hard to improve the legislation so it can pass.

We believe the digital assets industry absolutely needs regulatory guardrails, and the Clarity Act can help provide those, if one short but crucial provision in the 600-page bill is strengthened.

The provision aims to implement a bipartisan policy goal of preventing stablecoins from becoming shadow interest-bearing “deposits,” while still enabling innovation in payments. This distinction is critical to ensure consumers’ money is safe and to avoid unintended consequences for the economy.

Congress has already expressed its bipartisan view on this issue. The 2025 GENIUS Act bars stablecoin issuers from offering interest or yield, full stop. The debate now is whether affiliates like crypto exchanges can offer interest-like rewards that could incentivize consumers to move their bank deposits to stablecoin wallets. It’s an effort to evade the prohibition in the GENIUS Act.

Risk to the economy

Why should Congress be worried about such a shift? Bank deposits are the lifeblood of the U.S. economy. They are used by community, midsize, regional and large banks across the country to fund the loans that get small businesses off the ground, help young families into their first mortgage and provide farmers and ranchers the financing they need to operate.

While they are an important payment innovation, stablecoins can’t match the economic impact of bank deposits, which is why Congress rightly recognized that the two are dramatically different and shouldn’t compete directly. Among other key differences, stablecoins lack certain consumer safeguards, including the FDIC insurance protection offered by bank deposits.

Some Senators think the current Clarity Act addresses this concern, but there simply is not enough clarity around what’s allowed and what’s not. For example, it’s unclear whether paying a stablecoin holder a flat amount monthly that increases as balances rise would be prohibited. That sure looks and sounds like an interest payment, but the bill leaves the determination ambiguous, setting up a nightmare scenario – and most likely litigation – for the regulators that need to implement it. The Senate can address this flaw.

Simple fix

For months now, we’ve recommended a handful of specific word changes in the 600-page bill to solve the issue. For example, we’ve urged lawmakers to prohibit stablecoin rewards that are “substantially similar” to interest payments versus the more ambiguous text in the bill. In another sentence, we have urged them to remove the word “solely.” Doesn’t sound like a wrecking ball of edits, does it?

Importantly, our modest changes would still allow crypto companies to offer plenty of reward programs, just not ones that mimic interest. In addition to improving the legislation, the changes would improve the Clarity Act’s chances of clearing Congress and ultimately becoming law.

The crypto response

Rather than explain why our recommended changes aren’t reasonable, supporters of the current bill have resorted to misinformation and disinformation. Some have claimed that we agreed to the current language on stablecoin rewards, and now we are reneging on a deal.

This is fiction.

Agreement on a policy objective and agreement on whether a proposal effectively implements that objective are two different questions, and in this case, they have different answers. The words in the law matter, and while we deeply appreciate bipartisan efforts to improve the language, we have made clear privately and publicly at every opportunity that the current stablecoin provision needs to be strengthened further for the good of the economy.

Defenders of the current language also argue that there's been no substantial deposit flight since the GENIUS Act passed, and therefore, there's no risk to the economy. The argument is irrelevant. Regulators have not even finished the final rules for the GENIUS Act, and market participants are waiting to see what happens with the Clarity Act. This is a future-looking problem that the Senate has the opportunity to solve now. This line of reasoning also conveniently ignores forecasts showing the loss of lending capacity if Congress doesn’t put reasonable guardrails in place.

Next steps

Over the August recess, bank leaders in every state are engaging with lawmakers and sharing their concerns. In some cases, they have been joined by bank customers worried about the bill. We have been encouraged by the growing number of Senators who recognize the economic risks and are pushing for changes to the stablecoin section before they cast any final Clarity vote.

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ABA Viewpoint: The Genius Act rules are (almost) here. Here’s what banks should do

The real work for most banks isn't deciding whether or not to become an issuer. It's building the strategy that comes after that answer and showing up as the critical and trusted infrastructure bank customers continue to rely on. 

Congress gave federal regulators until July 18, 2026, to finalize the Genius Act’s implementing rules. That deadline came and went without a coordinated final package, but don’t mistake the delay in establishing final rules of the road for stablecoin for a reprieve.  

The Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, U.S. Department of Treasury, and the Financial Crimes Enforcement Network/Office of Foreign Assets Control all have published detailed proposals, with a rule from the Federal Reserve Board still to come. Many comment periods are closing through August, and a final rule set is coming. For banks, the shape of that framework is becoming clear enough to plan around, even if the ink on the page isn’t dry, and the Clarity Act remains in play. 

Here’s the short version of what’s expected in the final rules, and what banks should consider. 

The framework, in brief 

The Genius Act outlines the regulatory guardrails for issuing stablecoins and who can be a “permitted payment stablecoin issuer,” with three pathways: as a subsidiary of an insured depository institution, as a national trust company regulated by the OCC, or as a standalone nonbank entity licensed federally by the OCC or under a state regime deemed substantially similar. Of the agency rules, the OCC’s implementing rule is the backbone. It was first out of the gate. It’s the most comprehensive, and the FDIC’s and NCUA’s proposals largely track its structure for the institutions they supervise. Regardless of the licensing path, all PPSIs are subject to prudential requirements, with a separate Bank Secrecy Act/anti-money laundering/sanctions overlay being built in parallel by FinCEN, OFAC and the prudential regulators. 

What banks should care about 

Skip the noise and focus on four open questions that will shape the competitive landscape between banks and nonbank issuers: 

• The interest/yield prohibition. The Genius Act’s intent was clear: Issuers can’t pay interest or yield on stablecoins, full stop. As ABA has stressed throughout the process, the rulemaking’s anti-evasion language, particularly as it relates to indirect yield such as distribution-fee arrangements, will determine how much daylight exists for issuer-affiliated rewards programs. The result will shape whether stablecoins stay as pure payments tools or as interest-bearing instruments offered by institutions outside the banking system that create deposit flight from banks and ultimately a reduction in lending and economic growth. Concern that these rules will not go far enough is exactly why ABA is calling on Congress to tighten the language around stablecoin rewards in the Clarity Act.  

• Whether nonbanks get a real bank-equivalent bar. Redemption obligations, reserve composition rules, and capital and liquidity requirements apply to any PPSI, whether a subsidiary of a bank or a non-bank entity, but the rulemakings will determine whether nonbank issuers will be held to standards substantively equivalent to a PPSI that is a bank subsidiary or given lighter treatment as a “new” product. If it’s the latter, bank stablecoin issuers are competing against issuers operating under a materially lower cost structure. 

• Who’s actually on the hook across the ecosystem. Issuers and reserve custodians aren’t the only players. Distributors, wallet providers and payment intermediaries all touch the product. The Genius Act clearly regulates issuers and creates obligations for digital asset service providers as well with regulations due by 2028, but important questions remain about how responsibility and supervisory expectations will be allocated across the broader stablecoin distribution chain.  

• Consumer protection hasn’t caught up to the product. De-peg loss, redemption delays, fraud and unauthorized transfers are all real risks for a stablecoin holder, but existing consumer protection and disclosure frameworks haven’t been mapped onto this product yet. Holders need clear protections against these risks before adoption scales further. There’s an open question about whether regulations will address this and if not, how this gap will be filled. 

Those four fault lines describe the environment to watch. The question every bank actually has to answer is simpler: Should you try to become a player in that environment as an issuer, or build around it? 

Should your bank become an issuer? 

Whether to establish a PPSI depends greatly on the business plan of the bank and how it would integrate payment stablecoins into its roadmap for customers. For most banks, becoming a PPSI is probably not the right call. A bank’s typical business model runs on taking deposits and making loans, but PPSI reserves generally can’t be rehypothecated. They must sit in high-quality liquid assets (e.g., cash or short-term treasuries), earning little and doing nothing for the loan book. Worse, the deposits most likely to migrate into a bank’s own stablecoin are the cheap, sticky ones already on the balance sheet. Meaning a bank isn’t attracting new low-cost funding by issuing; it’s converting funding it already had into a form it can no longer relend. Add a dedicated compliance build-out on par with a new business line, and this isn’t a spread business, it’s a cost center with regulatory tail risk attached and one where margin depends on scale and interest rates. A couple of dominant, well-capitalized nonbank issuers are already built for that math; most banks, especially community and midsize institutions, are unlikely to be well positioned to individually compete on it. 

What should banks be doing? 

Skipping issuance doesn’t mean skipping the space. Before picking a strategy, a bank needs a clear view of where stablecoins actually fit in its own payments stack, since a retail-heavy community bank and a bank with a large corporate treasury book won’t prioritize the same innovation. Below are four moves a bank can consider to engage in stablecoins, depending on the bank and the strategy: 

• Tokenized deposits. If the appeal of payment stablecoins is programmability, faster settlement, and interaction with on-chain assets, tokenized deposits deliver that without the need for a new issuer entity, a new capital stack, or new redemption obligations, because they remain deposits, not stablecoins. They function as regular bank deposits, and unlike PPSI reserves, which cannot be lent against, they can fund fractional reserve lending, preserving banks’ core credit intermediation role rather than sidelining it. 
• A wallet for customers who use payment stablecoins. Plenty of customers will want to hold and transact in payment stablecoins regardless of what the bank does. Rather than cede that relationship entirely, banks can offer a customer-facing wallet, letting customers buy, hold and move stablecoins through an interface the bank controls. This keeps the bank in the customer relationship and the fee income, while the issuer, not the bank, carries the reserve, redemption, and capital obligations under the PPSI framework. 
• Reserve custody for issuers. Stablecoin issuers need somewhere to hold the reserve assets backing their coins, and banks are a natural fit for holding reserve deposits for a PPSI, or serving as qualified custodian for those reserve assets, putting the bank at the center of the framework. 
• Fiat on/off-ramps. Processing the deposit-to-stablecoin and stablecoin-to-deposit conversions for customers is a fee-generating, deposit-gathering role that leans on capabilities banks already have, including “know your customer” processes, payments infrastructure and settlement, rather than requiring a new balance-sheet commitment. 

The bottom line 

The Genius Act framework is being built to pull everyone touching stablecoin issuance, reserves or custody into a bank-grade compliance perimeter. How the open regulatory questions above get resolved will shape who has the advantage inside that perimeter, but it won’t change the basic shape of the opportunity. The real work for most banks isn’t deciding whether or not to become an issuer. It’s building the strategy that comes after that answer and showing up as the critical and trusted infrastructure bank customers continue to rely on.  

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Politico: Crypto in 'limbo'

It was supposed to be an historic year for cryptocurrency policymaking in Washington, with lawmakers gearing up to pass a landmark digital assets bill and regulators set to roll out new rules for the $2 trillion market.

Eight months later, the industry is still waiting — and growing antsier by the day.

Lawmakers’ failure to enact their bill before leaving town earlier this month had already left some crypto officials worried that Congress just missed its best chance at passing the legislation, a top industry priority. Now, the Paul Atkins-led Securities and Exchange Commission’s surprise decision to punt on proposing a landmark crypto rule last week is further fanning those frustrations.

“Everyone’s like, you’ve got to be kidding me,” said a crypto industry official, who was, like others for this report, granted anonymity to speak candidly. “How can we not walk and chew gum at the same time?”

A crypto lobbyist told MM that the delays have launched the industry into a state of “limbo” where companies are anxiously waiting on policymakers to tell them how to operate in the U.S.

The crypto industry is far from out in the cold. Just look at the White House’s planned Wednesday gathering of top executives from companies like Coinbase, Andreessen Horowitz and Ripple, among more traditional financial firms and other upstart players such as prediction markets. President Donald Trump is expected to attend, as are Atkins and Commodity Futures Trading Commission Chair Michael Selig, according to a person familiar with the event.

But the dismay underscores how even an industry as influential as crypto — which has plenty of high-profile allies across the nation’s capital and millions of dollars in campaign funds at the ready — isn’t immune from the realities of Washington, where Senate calendars, unexpected scheduling issues and rival industries loom large. It also highlights the rising tension around policymakers’ attempts to set up a new regulatory framework for crypto, a push that has already incited the ire of some Democrats, Wall Street stalwarts and ethics watchdogs.

The SEC postponement came as a shock to many in the crypto industry, who saw the planned rule, known as Reg Crypto, as relatively uncontroversial. Reg Crypto is aimed at providing entrepreneurs and executives a clear roadmap to raising money through the crypto markets in the U.S. And while the SEC pointed to “an unforeseen scheduling issue,” that did little to stem a flurry of speculation on K Street about why the SEC punted.

A person familiar with the decision said the delay was because the proposal was still under review by others in the administration. Another person familiar with the matter said the White House has been involved in some of the conversations surrounding the SEC’s crypto rulemaking efforts.

Nonetheless, while frustrations are mounting in the wake of the delay, the crypto industry isn’t giving up on its biggest priority: the so-called Clarity Act.

The legislation, which would set up a new regulatory framework for digital asset trading in the U.S., was dealt a major setback earlier this month when the Senate didn’t vote on it before the August recess. But Senate Majority Leader John Thune did tee the bill up for a preliminary vote in September, which has lent hope to some. Crypto Council for Innovation CEO Ji Kim said the move “has given stakeholders a clear target to work toward” during the break.

“Recess is busy, and the momentum across the board remains strong,” Kim said.

Others believe Wednesday’s gathering — which is ostensibly a kick-off to the CFTC’s first-ever Innovation Advisory Committee meeting later this week — could turn into a show of support for the bill.

And yet, while legislation will help cement crypto’s place in the U.S., the industry’s frustrations suggest that its willingness to wait on a bill rather than let the regulators take the lead is starting to run thin.

“You can’t just hold out forever,” the crypto lobbyist said.

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ABA Banking Journal: ABA voices support for updating hedge accounting standards

A proposed accounting standards update on derivatives and hedging would remove unnecessary constraints on the latter, thereby better aligning financial reporting with institutions’ risk management activities, the American Bankers Association said today in a letter to the Financial Accounting Standards Board.

The proposed update would make targeted improvements to hedge accounting to allow hedging interest rate risk for held-to-maturity debt securities, broaden the Secured Overnight Financing Rate (SOFR) benchmark rate and expand the population of eligible net investment hedging instruments. ABA said it strongly supports the update, which “appropriately focuses on discrete issues that can be addressed without reopening the broader hedge accounting model.”

“The proposed amendments would help remove accounting constraints that may discourage economically sound risk management strategies, particularly for institutions that manage interest rate risk in securities portfolios, use SOFR-based instruments to hedge benchmark interest rate exposure or use cross-currency swaps to manage foreign currency risk associated with net investments in foreign operations,” ABA said.

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CISA News: Private security firms will soon be allowed to hack overseas cybercriminals

The Trump administration is recruiting private security firms to conduct federal government-authorized operations, including cyberattacks, against overseas-based criminal organizations that commit hacks on US persons, organizations, or government entities.

In a National Security Presidential Memorandum issued Thursday, US President Donald Trump directed the National Coordination Center (NCC), which operates under the Homeland Security Task Force, to develop a program for conducting specific cyber operations that combat foreign transnational criminal organizations (TCOs). The Departments of Justice and Homeland Security will provide oversight. The lynchpin of that program is bringing in private sector companies to participate.

Devil will be in the still-undefined details

A fact sheet that accompanied Thursday’s memo listed ransomware, sextortion schemes, phishing campaigns, financial fraud, and impersonation scams as activities eligible for private-sector security firms to target. The memo said such firms could “conduct Cyber Surveillance Operations and Cyber Effects Operations” against “cyber-enabled” TCOs. Such groups are defined as “any foreign group that conducts cyber-enabled crime against the United States Government, a United States person, or United States interests, and that is not an institutional part of a foreign government or wholly operated under a foreign government’s direction.”

The new program is the first time the federal government will authorize private companies to conduct offensive cyber operations against overseas hackers. The memo appears to permit companies participating in the program to use spyware or launch offensive attacks intended to destroy TCO data or systems. The memo doesn’t rule out certain types of offensive attacks, such as those that use encryption to lock targets out of their networks or performing distributed denial-of-service attacks. Up until now, the government has prohibited the private sector from taking such actions without court-authorized approval.

“There’s definitely merit in the idea of hacking ransomware groups and it does already in fact happen (don’t ask me how I know),” independent security researcher Kevin Beamont said in response to the memo. “But the correct incentives have gotta be there.”

He added: “The biggest problem I’ve had with fighting ransomware over the past 5 years is private cyber companies basically lobbying for nothing to change. A lot of companies have made a lot of money, so putting them in charge of stopping it seems optimistic.”

The memo placed specific limits on the scope of the new program. Private companies must first be approved after vetting by the Departments of Justice and Homeland Security. Cyber Effects Operations and Cyber Surveillance Operations may not result in “Critical Outcomes,” meaning those that result in the loss of life or serious injury or “rise to the level of use of force or armed attack under international law.” The memo also notes:

[M]inimum standards that Participating Companies must meet in order to take part in the Program, which shall include appropriate levels of technical proficiency, proven performance of cyber operations, facility security, personnel vetting, competence, reliability, and other factors that the Program Executive Directors, in coordination with the Homeland Security Council, determine are relevant or necessary for guaranteeing high confidence in a Participating Company’s ability to perform successfully.

Participating companies must also deposit $1 million in an escrow account. The deposit will be forfeited “should the Participating Company enter non‑compliance with its contractual agreement described” in the memo.

Many of the specifics of the policy remain undefined. These details will be crucial to determining how effective and judicious the program will be. The memo directs the Justice and Homeland Security departments to deliver the particulars in the next 60 days.

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2027 Scenes of South Dakota Calendars: Early Bird Rates end September 1

Each year, the SDBA offers the Scenes of South Dakota Calendar. This calendar features photos of South Dakota submitted by South Dakota bankers, their family members, and customers.

Scenes of South Dakota calendars are a great opportunity to thank your customers for their business and promote your bank or business. Your bank, branch, or business logo and name can be printed on each calendar to display in homes and businesses year round.

Place your order for the 2027 Calendar

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Learn how to put compliance management solutions from Compliance Alliance to work for your bank, by contacting (888) 353-3933 or [email protected] and ask for our Membership Team. For timely compliance updates, subscribe to Bankers Alliance’s email newsletters. 

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