The American Bankers Association (ABA) has launched a direct rebuttal against a recent White House report, arguing that economists failed to account for the true threat stablecoin yields pose to the U.S. banking system.
In a new study, the ABA claims the Council of Economic Advisers (CEA) analyzed the wrong scenario regarding the growth of digital assets. The association argues that instead of evaluating the impact of a potential ban on stablecoin yields, the White House should have modeled the consequences of allowing those yields to persist.
"The CEA paper minimizes the core risk by starting from the wrong question," ABA economists stated. They argued that prohibiting yield on payment stablecoins serves as a "prudent safeguard" to prevent them from becoming risky substitutes for insured deposits.
The battle over the Clarity Act
The dispute centers on the Digital Asset Market Clarity Act, a piece of legislation intended to regulate U.S. crypto markets. The bill has stalled in the Senate due to disagreements over whether stablecoin issuers should be allowed to offer interest-like returns to users.
Bankers contend that if stablecoin markets scale from their current $300 million to an estimated $2 trillion, yield will act as the primary driver for moving capital out of traditional banks. They warned that these returns could trigger a mass migration of deposits.
While large-scale stablecoin issuers would likely keep their reserves in major financial institutions, the ABA warned that community banks would be particularly vulnerable. The association suggests that these outflows could undermine the broader U.S. lending market.
Lawmakers have previously attempted a compromise by allowing rewards programs—similar to credit card perks—while banning yields that mimic deposit accounts. However, the banking sector remains opposed to the current framework.
Senator Cynthia Lummisch, chair of the Banking Committee's digital assets subcommittee, signaled urgency on social media Monday, stating that "America needs Clarity." She noted over the weekend that the window for passing the legislation is closing.
Despite the momentum, a session for the Senate Banking Committee to hear the bill has not yet been scheduled. The ongoing friction over yield remains the primary hurdle to the bill's passage.
