The US crypto industry's flagship policy initiative, the Digital Asset Market Clarity Act, remains stalled due to disagreements over stablecoin yields, which bankers claim could lure depositors away from traditional banks. In response to a White House report downplaying the risks, the American Bankers Association contends that economists are focusing on the wrong scenario.
Instead of analyzing the effects of banning stablecoin yields, they should consider the consequences of allowing such yields to continue. The ABA argues that permitting stablecoin yields could lead to a rapid scaling of the market, from $300 million to $2 trillion, and accelerate the migration of deposits out of traditional banks. This debate has stalled the Clarity Act, which aims to regulate the US crypto market, and lawmakers are under pressure to address the issue.
The longer the debate continues, the more challenging it will be to pass the legislation.