A White House report found that banning stablecoin yield would have little effect on bank lending. The analysis shows only minor gains in credit growth. At the same time, it warns of clear economic costs for users.
The report issued by the Council of Economic Advisers on Wednesday. It examined how funds might shift from stablecoins back into bank deposits. The findings suggest that such movement would not lead to meaningful increases in lending activity.
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Under its baseline estimate, total bank lending would rise by about $2.1 billion. This equals roughly 0.02% of the $12 trillion U.S. loan market. The report states that the effect remains small even under standard market conditions.
Even more modest gains will be seen in community banks. Their loans will grow by approximately $500 million, which accounts for only 0.026%.
The Independent Community Bankers of America has argued that the yields on stablecoins may lead to a reduction in deposits. However, the crypto organizations have denied this assertion and questioned the scale of the risk.
Furthermore, the report shows the cost of prohibiting rewards in economic terms. The estimated welfare loss amounts to approximately $800 million annually. It results from users’ inability to earn yield on stablecoins.
The benefit-cost ratio has been calculated at 6.6 in accordance with the study’s results. Consequently, economic costs will outweigh potential benefits regarding lending. The analysis concludes that the trade-off is not favorable.
Furthermore, it suggests that high profits from lending will depend on unrealistic assumptions. The first is an increase in the market capitalization of stablecoins. The second assumption involves drastic changes in reserve management and monetary policies.
Action has been taken regarding this aspect of legislation. In July 2025, President Donald Trump signed the GENIUS Act into law. It prohibits stablecoin issuers from paying interest to their investors.
Nevertheless, outside platforms may continue offering yield products. Lawmakers currently examine the Digital Asset Market Clarity Act. The act intends to establish whether the yield should be prohibited or accepted based on certain criteria.
In July 2025, the bill is approved by the U.S. House of Representatives. Progress in the Senate has stalled after that. Paul Grewal says that there is almost unanimous agreement among lawmakers. He noted that stablecoin yield remains the key issue.
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