The US crypto industry's key legislative effort, the Digital Asset Market Clarity Act, has stalled due to disagreements over stablecoin yield. Bankers argue that the White House economists' recent report underestimated the risks, while the American Bankers Association claims that allowing stablecoin yield could lead to a massive migration of funds out of bank deposits.
The ABA contends that the White House economists' analysis was flawed, as it focused on the wrong scenario and ignored the potential consequences of permitting stablecoin yield. The conflict has delayed 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 bankers' latest arguments warn that the absence of intervention on stablecoin yield could lead to a rapid scaling of stablecoin markets, potentially reaching $2 trillion, and accelerate the migration of funds out of bank deposits.