The US crypto industry's key legislative effort, the Digital Asset Market Clarity Act, remains stalled over concerns about stablecoin yields, which bankers claim pose a threat to deposits. In response to a White House report downplaying these risks, the American Bankers Association argues that economists analyzed the wrong scenario, focusing on the effects of banning stablecoin yields rather than allowing them. The ABA economists argue that permitting stablecoin yields could lead to a significant migration of deposits away from banks, undermining their stability.
This disagreement has hindered the progress of the Clarity Act, with lawmakers attempting to find a compromise that would restrict yield on stablecoin holdings resembling deposit accounts. However, the banking industry remains unconvinced, warning that the absence of intervention could enable stablecoin markets to grow exponentially, from $300 million to $2 trillion, and accelerate the migration of deposits out of banks.