The US crypto industry's efforts to pass the Digital Asset Market Clarity Act have been hindered by a dispute over stablecoin yields, which bankers argue could jeopardize bank deposits. In response to a White House report downplaying the risks, the American Bankers Association asserts that the analysis was flawed, focusing on the wrong scenario. The ABA economists argue that allowing stablecoin yields could lead to a massive migration of funds out of bank deposits, ultimately threatening the stability of the banking system. The conflict has stalled the Senate legislation, with lawmakers struggling to find a compromise between the banking industry's concerns and the crypto industry's push for regulatory clarity.
The ABA warns that without intervention, the stablecoin market could scale rapidly, reaching up to $2 trillion, and accelerate the migration of funds out of bank deposits. The issue remains a contentious point, with the crypto industry advocating for regulatory clarity and the banking industry pushing for safeguards to protect deposits.