The former senator said stablecoins' roughly $300 billion market shows they warrant a standalone framework rather than bank-style regulation, echoing his earlier Stablecoin TRUST Act.
Former U.S. Senator Pat Toomey is pressing lawmakers to move the Digital Asset Market Clarity Act, or CLARITY Act (H.R. 3633), before the Senate leaves for its August recess, arguing that stablecoins should be regulated under a dedicated framework rather than treated like banks. In August 4 remarks, Toomey pointed to the sector's approximate $300 billion market size as evidence that stablecoins have moved beyond an experimental phase, while saying that growth has not come at the expense of traditional bank deposits. That argument directly addresses a longstanding concern from banks that stablecoins could pull deposits out of the banking system. Toomey compared those fears to banks' reaction to money market funds in the 1970s, when concerns about deposit flight ultimately gave way to a system that accommodated both products. Money market funds later received their own regulatory structure under the SEC (U.S. securities regulator), rather than being pushed into bank charters. The position is consistent with Toomey's Stablecoin TRUST Act from December 2022, which proposed a dedicated stablecoin regime under the Office of the Comptroller of the Currency (U.S. bank regulator). While that bill did not pass, the article says its approach is reflected in the CLARITY Act. The newer bill advanced through the Senate Banking Committee on May 14 in a bipartisan 15-9 vote. The measure would bar stablecoin issuers from offering rewards that function like interest on bank deposits, while still permitting transaction-based incentives. For investors and issuers, that could create clearer boundaries around what resembles deposit-taking and what counts as usage-driven promotion. The article suggests a federal licensing path outside traditional banking charters could improve institutional confidence, lower entry barriers for new issuers and give existing firms such as Circle and Tether a clearer compliance route. The piece also flags unresolved risks. Opposition from nine senators signals the bill could still face political friction, and any final version that imposes bank-like capital requirements or reserve mandates could dilute Toomey's goal. It adds that DeFi (decentralized finance) products tied to stablecoin yield, lending and staking (locking crypto to support a network) could face restructuring if the prohibition on deposit-like rewards becomes law.