The US crypto industry's main legislative push, the Digital Asset Market Clarity Act, remains stalled due to concerns over stablecoin yields. Bankers have reignited the debate, arguing that the rewards programs offered by stablecoins could jeopardize bank deposits. In response to a White House report downplaying the risks, the American Bankers Association claims that economists analyzed the wrong scenario.
The ABA argues that allowing stablecoin yields could lead to a mass exodus of depositors from traditional banks, seeking higher returns from stablecoins. This dispute has hindered the progress of the Clarity Act, which aims to regulate US crypto markets. Senators have proposed a compromise to ban yield on stablecoin holdings that resemble deposit accounts, but bankers remain unconvinced. The longer the debate continues, the more challenging it will be to pass the Clarity Act.
Bankers warn that inaction on stablecoin yields could lead to a rapid expansion of the stablecoin market, accelerating the migration of funds out of bank deposits.