The US cryptocurrency industry's primary legislative effort, the Digital Asset Market Clarity Act, has been stalled due to concerns over stablecoin yields, which bankers argue could lure depositors away from traditional banks. In response to a White House report downplaying the risks, the American Bankers Association claims that the analysis is flawed, focusing on the wrong scenario. Instead of examining the effects of a ban on stablecoin yields, the ABA argues that the White House should consider the consequences of allowing such yields to continue. The ABA economists assert that prohibiting stablecoin yields is essential to preventing them from becoming a risky substitute for insured bank deposits.
This dispute has delayed the Senate legislation, with lawmakers attempting to find a compromise that would ban yield on stablecoin holdings resembling deposit accounts. However, the banking sector remains unconvinced, warning that the absence of intervention could lead to a rapid scaling of stablecoin markets, accelerating the migration of deposits out of traditional banks. The ABA suggests that leading stablecoin issuers would likely deposit reserves in larger institutions, bypassing community banks.