The US crypto industry's efforts to advance the Digital Asset Market Clarity Act have been hindered by a contentious point regarding stablecoin yields, which bankers claim poses a threat to bank deposits. In response to a White House report downplaying the risks, the American Bankers Association argues that the Council of Economic Advisers analyzed the wrong scenario. The ABA economists assert that the real concern lies in what would happen if stablecoin yields were allowed, rather than banned. They believe that permitting such returns would lead to a risky substitution for insured bank deposits, and that a ban on yield for payment stablecoins is a necessary precaution.
This debate has stalled the Senate legislation for months, despite lawmakers' attempts to find a compromise. The conflict centers on the potential for stablecoin yields to outpace bank interest rates, prompting depositors to abandon traditional banks. While some lawmakers predict the Clarity Act could receive a Senate hearing soon, the banking industry remains unconvinced, warning that inaction on stablecoin yields could lead to a rapid scaling of stablecoin markets, accelerating the migration of funds out of bank deposits.