The US crypto industry's efforts to advance the Digital Asset Market Clarity Act have been hindered by a contentious issue surrounding stablecoin yields, which bankers claim poses a threat to bank deposits. In response to a White House report downplaying the risks, the American Bankers Association argued that the economists' analysis was misguided, focusing on the wrong scenario.
The ABA economists stated that the real concern lies in the potential consequences of allowing stablecoin yields, which could lead to a significant migration of funds out of bank deposits. The debate has stalled the Senate legislation, with lawmakers attempting to find a compromise that addresses the bankers' concerns. The proposed Clarity Act aims to regulate the US crypto market, but its progress has been slow due to the ongoing dispute over stablecoin yields.
The American Bankers Association has warned that the absence of intervention could lead to rapid growth in the stablecoin market, potentially reaching $2 trillion, and accelerating the migration of funds out of bank deposits. The organization argues that this could have severe consequences for community banks, which may not benefit from the deposits of leading stablecoin issuers.