U.S. Banking Industry Questions White House Report on Stablecoin Yields
Svmuu News The U.S. banking industry has raised questions about the White House's report on stablecoin yields, arguing that its conclusions are based on flawed premises. A research report from the White House Council of Economic Advisers stated that prohibiting stablecoin yields would have a minimal impact on bank lending, potentially increasing loans by only about $2.1 billion. Sayee Srinivasan, Chief Economist, and Yikai Wang, Vice President, of the American Bankers Association stated that the core policy concern is whether allowing stablecoins to generate yields would incentivize deposit outflows, particularly from community banks to larger institutions, thereby increasing funding costs and reducing local lending. The American Bankers Association acknowledged that the financial incentive to pursue higher-yielding stablecoins would prompt households and businesses to move funds out of banks. Currently, the crypto and banking industries are negotiating over provisions in a Senate bill, with the prohibition of stablecoin interest payments being a key point of contention.
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