White House Report Suggests Stablecoin Yield Bans Would Harm Users With Minimal Bank Benefit

The White House has released a report concluding that banning yields on stablecoins would provide negligible benefits to the banking sector while imposing significant economic costs on consumers. The analysis, produced by the Council of Economic Advisers (CEA), addresses the ongoing tension between traditional banking organizations and the digital asset industry. While groups such as the Independent Community Bankers of America have argued that stablecoin yields drain deposits and reduce lending capacity, the CEA finds these concerns largely unfounded. According to the report, shifting funds from stablecoins back into bank deposits would increase total bank lending by only $2.1 billion, representing a mere 0.02% of the $12 trillion loan market. Community banks would see an even smaller uptick of approximately $500 million, or 0.026%. Conversely, the report estimates a net welfare loss of $800 million annually due to the loss of yield access for users. This results in a cost-benefit ratio of 6.6, suggesting the economic downsides far outweigh the lending advantages. The CEA noted that significant lending effects would only occur under highly unlikely scenarios, such as a sixfold increase in stablecoin share combined with a total shift in reserves. This finding arrives as the Senate Banking Committee considers the CLARITY Act. While the GENIUS Act of 2025 already prohibits issuers from paying interest, third-party platforms continue to offer yields. The CLARITY Act seeks to resolve whether these rewards should be restricted across the board or allowed under specific conditions, a point of contention that has delayed the bill's markup.