The US crypto industry's main legislative push, the Digital Asset Market Clarity Act, remains stalled due to disagreements over stablecoin yields. Bankers have countered a White House economists' report, arguing that it misjudges the risks to deposits.
The American Bankers Association asserts that the White House analysis started with the wrong premise, focusing on the consequences of banning stablecoin yields instead of considering the implications of allowing them. The bankers claim that permitting stablecoin yields could lead to a mass exodus of depositors from traditional banks, chasing higher returns from stablecoins. A proposed compromise to restrict yield on stablecoin holdings and only allow rewards for activity has not satisfied the banks. The ongoing debate threatens to delay the Clarity Act's progress in the Senate.
The bankers warn that inaction on stablecoin yields could result in rapid market growth, accelerating the migration of funds out of bank deposits. They argue that even if leading stablecoin issuers deposit reserves in banks, these funds would likely go to larger institutions, bypassing community banks.