Clarity Act’s Bipartisan Support Dismantles Big Banks’ Deposit Flight Myth

• Coinbase CLO Paul Grewal highlighted that bipartisan support to advance the Clarity Act to plenary debate in the Senate means lawmakers are no longer buying the big banks’ unsubstantiated claims about stablecoin yields, particularly their arguments about deposit flight.

Paul Grewal, Coinbase’s Chief Legal Officer, recently discussed what the Clarity Act markup meant. He believes the bill’s bipartisan support has cleared up several sticky points, particularly the debate over stablecoin yields.

Bipartisan Vote Ignores Big Bank’s Pleas on the Clarity Act

In a video interview with Crypto in America, the Coinbase lawyer highlighted that the 15-9 vote from the Senate Banking Committee to elevate H.R. 3633, otherwise known as the Digital Asset Market Clarity Act of 2025, to the Senate floor speaks for itself. It has dismantled the big banks’ repetitive calls to restrict stablecoin yields, supposedly to prevent a massive deposit flight.

“What we saw was a fundamental repudiation of the core argument they have made against this legislation,” said Grewal to Eleanor Terrett and her colleagues.

The Coinbase executive recalled that at every meeting he had with banking representatives and their allied trade groups, the subject of deposit flight kept resurfacing.

“They kept making the argument that, somehow, if we allowed rewards to exist in any form, community banks would be decimated, that there’d be a massive deposit flight, and the financial system as a whole would come crashing down,” Grewal added.

However, Grewal argued that there’s never been any evidence to back their claims. It’s the very reason the Banking Committee’s bipartisan vote largely ignored their efforts to derail the Clarity Act’s markup, which could have prevented its language on stablecoin yields from advancing.

The Deposit Flight Debate

The big bank’s arguments were mainly anchored in statements made early this year by Brian Moynihan, CEO of Bank of America (BOA), asserting that such rewards would redirect over $6.6 trillion from the banking system to stablecoins. Additionally, he noted that the scenario would affect community banks’ lending capacity, thereby increasing borrowing costs for consumers. Meanwhile, Standard Chartered raised the same concerns, but with much lower figures at $500 billion.

Crypto community members and non-members fired back at the reports, demanding concrete evidence to support their claims. For them, it’s a futile effort by the big banks to curb a measure that would give Americans the freedom to decide what to do with their own money and prevent competition that would greatly benefit consumers.

Even President Donald Trump’s Council of Economic Advisers (CEA) refuted the big bank’s narrative of deposit flight. It released its own report in April, which found that the effect of stablecoin yield to deposits and contract lending is “quantitatively small.”

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