The US crypto industry's efforts to pass the Digital Asset Market Clarity Act have been hindered by disagreements over stablecoin yields, which bankers claim pose a threat to bank deposits. In response to a White House report downplaying this risk, the American Bankers Association argues that the economists' analysis is flawed, focusing on the wrong scenario. The ABA believes that allowing stablecoin yields could lead to a significant migration of funds out of bank deposits, ultimately destabilizing the banking system. This concern has stalled the legislation in the Senate, despite predictions that it could be heard in the Senate Banking Committee soon.
The bankers argue that the absence of regulation on stablecoin yields could allow the market to grow rapidly, from $300 million to $2 trillion, and that this growth would be driven by yield-hungry investors, potentially at the expense of community banks.