The American Bankers Association (ABA) fired back at a White House Council of Economic Advisers (CEA) report, arguing it ignored the real risk stablecoin yield poses to community banks.
The CEA paper concluded that prohibiting yield on payment stablecoins would increase total bank lending by just $2.1 billion, or 0.02% of all loans. It estimated consumers would lose roughly $800 million annually in forgone returns.
ABA Warns of Deposit Flight as Stablecoins Scale
The ABA said the CEA “studied the wrong question.” Rather than modeling the impact of a ban, the ABA argued policymakers should examine what happens when yield-paying stablecoins scale rapidly.
The banking group warned that stablecoins backed by Treasuries and offering competitive returns could pull cheap deposits away from community banks.
That shift would raise funding costs and reduce local lending to small businesses, farmers, and homebuyers. The Treasury Department previously estimated $6.6 trillion in deposits could be at risk.
“By focusing on the effects of a prohibition, the CEA paper risks creating a misleading sense of safety by avoiding the much more consequential scenario: yield-paying payment stablecoins scaling quickly,” read an excerpt in the ABA Banking Journal.
Senate Faces Two-Week Window on Clarity Act
The dispute lands as the Senate returns from recess with a narrow window to advance the Digital Asset Market Clarity Act.
Treasury Secretary Scott Bessent has publicly urged passage, while SEC Chair Paul Atkins and CFTC Chair Michael Selig said their agencies are ready to implement the bill immediately.
According to Senator Cynthia Lummis, the CLARITY Act risks a four-year delay until after 2030 if it does not pass now.
Stablecoin yield remains the single issue blocking the bill. If the Senate Banking Committee does not mark it up by late April, the legislation will likely not return before the November midterm elections.