Citigroup CEO Jane Fraser pushes for changes to CLARITY Act, warns of unintended banking consequences

Citigroup CEO Jane Fraser isn’t trying to kill the Digital Asset Market Clarity Act. She’s trying to perform surgery on it before it becomes law. In a Fox Business interview, Fraser laid out her case for why the CLARITY Act, which passed the Senate Banking Committee in May 2026 with a bipartisan 15-9 vote, needs targeted revisions before reaching the finish line. Her primary concern: provisions that would allow rewards linked to stablecoin transactions could quietly drain deposits from traditional banks, weakening their ability to lend. The deposit drain problem Fraser’s argument isn’t that stablecoins are bad or that digital assets should be stifled. It’s that the specific reward mechanisms written into the current version of the CLARITY Act could create an uneven playing field. Traditional banks face strict reserve requirements and regulatory oversight on every deposit they hold. Stablecoin issuers offering comparable yield-like products might not face the same constraints, at least not yet. That asymmetry is what Fraser wants Congress to fix. She described the passage of a properly refined version of the CLARITY Act as a “very positive outcome for the entire system.” What the CL...