Stablecoin Yields will Bring Fresh Money to US Banks: Patrick Witt

Patrick Witt, executive director of the White House Council of Advisors for Digital Assets, contends that stablecoin yields will result in net new capital inflows to the American banking system, countering concerns that they will draw deposits away. He explains that foreigners exchange their local currency for stablecoins issued by US-based entities, which are typically backed by US dollars or Treasuries, representing massive global demand for the USD. This argument arises amid the ongoing debate surrounding the US CLARITY Act, where traditional banks fear stablecoin adoption could significantly reduce deposits, as estimated by Standard Chartered. Witt suggests that properly regulated (GENIUS-compliant) stablecoins will actually lead to deposit inflows, contrasting with the fears voiced by community banking executives who worry about liquidity risks.

(Source：Cointelegraph)