The ongoing debate over the Digital Asset Market Clarity Act in U.S. policy has been stalled due to disagreements about stablecoin yields and their potential impact on bank deposits. Bankers have pushed back against a White House economic report that downplayed the risks, claiming that the rewards programs offered by stablecoins could lure away depositors from traditional banks. The American Bankers Association argues that the White House economists analyzed the wrong scenario, focusing on the effects of banning stablecoin yields rather than allowing them.
The ABA suggests that permitting stablecoin yields could lead to a significant migration of funds out of bank deposits and into stablecoin markets, potentially destabilizing the banking system. This concern has been a major sticking point in the legislation, with lawmakers attempting to find a compromise that addresses the concerns of both the banking and crypto industries.
The delay in passing the Clarity Act has been attributed to the ongoing debate over stablecoin yields, with some lawmakers warning that the window for passing the legislation is rapidly closing. The banking industry's latest arguments emphasize the potential risks of inaction, predicting that the stablecoin market could grow exponentially if left unregulated, leading to a significant shift of deposits away from traditional banks.