The American Bankers Association is calling for tighter limits on stablecoin rewards, and a Senate committee will vote on crypto legislation on Thursday.

According to The Block, Rob Nichols, CEO of the American Bankers Association (ABA), sent a letter to executives of major banks on Sunday evening, urging them to contact senators and request further tightening of stablecoin rewards provisions before the Senate Banking Committee votes on Thursday. Nichols warned that the current draft bill fails to effectively prevent crypto companies from offering users "interest-like rewards," potentially leading to a significant outflow of bank deposits and threatening economic growth and financial stability. The current draft, negotiated by Senators Angela Alsobrooks and Thom Tillis, prohibits paying users interest or returns on stablecoin holdings but allows rewards linked to real activity or transactions; this provision has already been supported by Coinbase. Banking groups believe that the relevant exceptions have loopholes and can be circumvented, and on May 8th, they jointly sent a letter to Committee Chairman Tim Scott and Democrat Elizabeth Warren, requesting technical revisions to the wording of the provisions.