A White House report has found that banning yield on stablecoins would have minimal impact on bank lending while imposing significant economic costs. The analysis estimates a net welfare loss of roughly $800 million per year, far outweighing the potential $2.1 billion increase in bank loans. The findings come as U.S. lawmakers debate the CLARITY Act, which could clarify regulations for digital asset yields.
A report from the White House Council of Economic Advisers concluded that prohibiting stablecoin yield would marginally increase bank lending. According to the analysis, total bank lending would rise by about $2.1 billion, or 0.02% of the market.
Community banks would see even smaller lending gains of approximately $500 million. The report was published amid an ongoing clash between banks and the crypto industry over stablecoin rewards.
Banking organizations like the Independent Community Bankers of America have warned that yields could reduce bank lending. Crypto groups have consistently rejected this claim.
However, the report estimates a ban could cause a net welfare loss of $800 million annually. The economic cost would far exceed any lending benefits, with a cost-benefit ratio of about 6.6.
“Producing lending effects in the hundreds of billions requires simultaneously assuming the stablecoin share sextuples,” the report concludes. It states this would also require all reserves shifting into segregated deposits and a change in Federal Reserve policy.
President Donald Trump signed the GENIUS Act into law in July 2025, prohibiting issuers from paying yield. The proposed Digital Asset Market Clarity Act could clarify whether yield should be restricted or allowed.
The U.S. House of Representatives passed the CLARITY Act on July 17, 2025. Senate Banking Committee Chair Tim Scott delayed a planned markup in January, which remains unscheduled.
Last week, Coinbase chief legal officer Paul Grewal said the act could be nearing a Senate markup hearing. He noted that progress hinges on resolving disagreements over stablecoin yield.
