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In the days before a key Senate vote, the American Bankers Association sent more than 8,000 letters trying to change one provision of the CLARITY Act.

The fight is not really about crypto. It is about whether stablecoins are allowed to compete with bank deposits, and the answer could reshape both industries.

A yield-bearing stablecoin offers a stable dollar value, easy access and transferability on crypto rails, and interest funded by the reserves, which is to say it offers a substitute for a bank deposit, potentially a more convenient and higher-yielding one, outside the banking system.

If holders can earn a competitive return on a stablecoin that moves freely on the blockchain, why keep money in a bank account paying little interest? That is the question banks do not want their customers asking.