White House economists say stablecoin yields are fine. Banks are having none of it
White House economists say yield-bearing stablecoins pose little threat to bank deposits, according to a recent report. However, the bank lobby, represented by the American Bankers Association, rejects these findings, claiming the economists "studied the wrong question."
The dispute is the latest development in the long-running battle over stablecoin yield, which has stalled negotiations for the Clarity Act—a bill intended to create a regulatory framework for cryptocurrencies in the US. Banking representatives argue that allowing yield on payment stablecoins would encourage deposit flight from traditional banks, particularly community banks.
Conversely, the White House report suggests that a ban on stablecoin rewards would only provide a marginal $2.1 billion boost to banks while depriving consumers of competitive returns. US President Donald Trump has sided with the crypto industry, stating that "Americans should earn more money on their money" and accusing banks of trying to undermine the US crypto industry.
Despite the ongoing friction, White House crypto adviser Patrick Witt expressed optimism, indicating that senators may be reaching compromises on key issues within the Clarity Act. The bill's passage is viewed by many as a potential trigger for a significant Bitcoin price rally.
