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 traditional bank deposits. In response to a White House report downplaying these concerns, the American Bankers Association argues that the economic team analyzed the issue from the wrong perspective. The ABA economists believe that allowing stablecoin yields could lead to a significant migration of funds out of bank deposits, ultimately destabilizing the banking system.
This concern has been a major point of contention, with lawmakers attempting to find a compromise that would ban yields on stablecoin holdings that resemble deposit accounts. However, the banking industry remains unsatisfied with the proposed solution, and the debate continues to delay the passage of the Clarity Act.
The longer the debate drags on, the more challenging it will be to get the bill through the Senate. The American Bankers Association warns that the absence of regulatory intervention could lead to rapid growth in stablecoin markets, from $300 million to as much as $2 trillion, and that yield would become a key driver of this growth, accelerating the migration of funds out of bank deposits.