Trump’s crypto advisor says stablecoins will drive global deposits into US banking system

Patrick Witt, executive director of the President's Council of Advisors for Digital Assets and a crypto advisor to Donald Trump, argued that stablecoins compliant with the proposed GENIUS Act framework will likely increase deposits in the U.S. banking system, contrary to warnings from traditional banking groups.

Witt contends that massive global demand for USD will lead foreigners to exchange local currency for stablecoins issued by U.S.-based entities, resulting in a net inflow of new capital into American banks. He clarified that the concern shouldn't be the payment of yield itself, but rather the lending or rehypothecation of the underlying dollar reserves, which the GENIUS Act explicitly forbids stablecoin issuers from doing.

The debate over stablecoin yields remains a major hurdle for broader crypto market structure legislation, such as the Clarity Act. Despite the passage of the GENIUS Act establishing a federal framework for payment stablecoins, banks and crypto firms have not reached a compromise on yield offerings. The White House has hosted closed-door meetings to address this impasse, though bank representatives remain firm against stablecoin rewards.

(Source：The Block)