The US crypto industry's efforts to pass the Digital Asset Market Clarity Act have been hindered by disagreements over stablecoin yields, which bankers claim pose a risk to bank deposits. In response to a White House report downplaying this risk, the American Bankers Association argued that the economists were analyzing the wrong scenario. Instead of considering the effects of banning stablecoin yields, they should have examined the consequences of allowing such yields. The ABA economists stated, 'The CEA paper minimizes the core risk by starting from the wrong question.' They believe that prohibiting yield on payment stablecoins is a necessary precaution to prevent them from becoming a substitute for insured bank deposits.
This debate has stalled the Senate legislation for months, with lawmakers trying to find a compromise. The proposed ban on yield for stablecoin holdings that resemble deposit accounts has not been well-received by bankers, who argue that the absence of intervention would lead to a rapid scaling of stablecoin markets, accelerating the migration of funds out of bank deposits. The bankers contend that even if leading stablecoin issuers deposit reserves in banks, they would likely choose larger institutions over community banks.