The US crypto industry's key legislative push, the Digital Asset Market Clarity Act, remains stalled due to disagreements over stablecoin yields, which bankers claim pose a significant threat to traditional bank deposits. In a rebuttal to a White House report downplaying the risks, the American Bankers Association argues that economists mistakenly focused on the consequences of banning stablecoin yields rather than considering the potential outcomes if such yields were permitted. The ABA economists stated, 'The CEA paper underestimates the core risk by asking the wrong question.' They believe a ban on stablecoin yields is essential to prevent these coins from becoming a risky substitute for insured bank deposits. This dispute has hindered the progress of the Clarity Act, with lawmakers from both parties previously swayed by bankers' concerns that depositors might abandon traditional banks for higher-yielding stablecoins.
Although a compromise was proposed to restrict yield on stablecoin holdings resembling deposit accounts, the banking sector remains unsatisfied. As the debate continues, the likelihood of the Clarity Act passing through the Senate process diminishes. The bankers warn that inaction on stablecoin yields could lead to rapid market growth, from $300 million to $2 trillion, and accelerate the migration of funds out of bank deposits.