White House Analysis: Stablecoin Yield Ban Would Have Minimal Impact on Bank Lending
The White House has released an updated analysis from the Council of Economic Advisers (CEA) indicating that banning yield on stablecoins would have a minimal effect on increasing bank lending. The report estimates such a policy could boost total bank loans by approximately $2.1 billion, or just 0.02% of outstanding loans under baseline assumptions. The analysis also suggests community banks might see an increase in lending of around $500 million, representing about 0.03% of their loan books. The White House noted that the policy could carry a net welfare cost of roughly $800 million annually due to households losing competitive returns on stablecoin holdings. Under more extreme assumptions—such as significant growth in the stablecoin market and changes in reserve policies—the potential lending increase rises, but these scenarios are deemed unlikely. The report follows concerns from banking trade associations about deposit flight caused by stablecoin rewards.
