
Latest White House Report says StableCoin Yield Poses Limited Risk to Banks
whitehouse.gov/research/2026/…
PDF: whitehouse.gov/wp-content/upl…
"Conclusion
The yield prohibition in the GENIUS Act and its proposed reinforcement through the CLARITY Act may
be motivated by the concern that competitive stablecoin returns will draw deposits out of the banking system and contract lending. Our model shows that this concern is quantitatively small. Most stablecoin reserves recirculate through the banking system as ordinary deposits: only the 12% held in bank accounts is truly locked out of the credit multiplier (if banks apply a 100% reserve requirement), and even that fraction is further attenuated by prudential reserve requirements and voluntary bank liquidity buffers. At baseline calibration, eliminating stablecoin yield increases bank lending by $2.1 billion, which represents a net increase of 0.02% of total loans. Producing lending effects in the hundreds of billions requires simultaneously assuming the stablecoin share sextuples, all reserves shift into segregated deposits, and the Federal Reserve abandons its ample-reserves framework. It takes similarly implausible assumptions for the welfare effect of yield prohibition to turn positive.
Council of Economic Advisers"

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