ABA Says White House ‘Studied the Wrong Question’ on Stablecoin Yield Risk

The American Bankers Association (ABA) has responded to a White House Council of Economic Advisers (CEA) report, asserting that the report examined the incorrect issue regarding stablecoin yield risk. The ABA contends that the CEA's focus on the impact of banning yield on payment stablecoins, which estimated a minimal effect on bank lending and consumer returns, overlooked the more significant threat. Instead, the ABA argues policymakers should analyze the consequences of yield-paying stablecoins scaling rapidly. The banking group warns that these stablecoins, often backed by Treasuries and offering competitive returns, could siphon deposits from community banks. This potential deposit flight would increase funding costs for these banks and consequently reduce local lending to small businesses, farmers, and homebuyers. The Treasury Department has previously estimated that up to $6.6 trillion in deposits could be at risk. This debate arises as the Senate faces a limited timeframe to pass the Digital Asset Market Clarity Act, with stablecoin yield being the primary obstacle to its advancement.

(Source：BeInCrypto)