The US crypto industry's efforts to pass the Digital Asset Market Clarity Act have been hindered by disagreements over stablecoin yield, which bankers claim poses a risk to their deposits. In response to a White House report downplaying this risk, the American Bankers Association argues that the economists misunderstood the issue. The ABA believes that allowing stablecoin yield could lead to a significant migration of funds from bank deposits to stablecoins, particularly if the stablecoin market expands from $300 million to $2 trillion. This could have severe consequences for the banking sector, especially community banks.
The conflict has stalled the Senate legislation, with lawmakers struggling to find a compromise between regulating stablecoins and protecting bank deposits. The bill's supporters, including Senator Cynthia Lummis, are pushing for its passage, but the banking sector remains opposed to the current proposal.