The American Bankers Association (ABA) fired back at the White House today, releasing a formal rebuttal to the Council of Economic Advisers' (CEA) April 8 report on stablecoin yield. The ABA's core charge: the CEA modeled an irrelevant scenario, creating a "misleading sense of safety."
CEA's original analysis: Banning yield would only cut $2.1B in loans
The CEA's 21-page report concluded that prohibiting stablecoin yield would reduce bank lending by just $2.1 billion — roughly 0.02% of total outstanding loans. It dismissed fears of deposit flight as dramatically overstated and argued a yield ban would cost consumers $800 million in lost returns while doing little to protect bank lending. Crypto executives celebrated the findings, and Treasury Secretary Scott Bessent publicly urged Congress to advance the stalled CLARITY Act.
ABA: The wrong question was asked
The ABA's rebuttal, written by its chief economist and VP of banking research, said the CEA focused on the wrong scenario entirely. "By focusing on the effects of a prohibition, the CEA paper risks creating a misleading sense of safety by avoiding the much more consequential scenario: yield-paying payment stablecoins scaling quickly," the ABA wrote. The real policy concern, according to the group, is not what happens if yield is banned, but what happens if it is allowed — and stablecoins grow from today's roughly $300 billion market to $1-2 trillion. At that scale, yield becomes the mechanism that pulls deposits away from community banks, raises their funding costs, and reduces local lending.
Why this fight matters for crypto regulation
The CLARITY Act, which would establish a comprehensive U.S. crypto regulatory framework, has been stalled in the Senate Banking Committee since January 2026, partly over the stablecoin yield question. Coinbase withdrew its support after the bill moved to restrict yield-like rewards from exchanges. The CEA report was a deliberate White House intervention to break that impasse; today's ABA rebuttal is the banking industry's direct response. Congress now has two competing economic frameworks before it. Which one wins will determine whether yield-bearing stablecoins become legal at scale in the United States.
State-level impact: Iowa could lose up to $8.7B in lending
To illustrate the stakes, the ABA estimated that a single state like Iowa could see between $4.4 billion and $8.7 billion in reduced lending as the payment stablecoin market grows. That localized pain, the group argues, is the real risk that the White House report glossed over.
No new hearings have been scheduled, but both sides have now laid out their full arguments. Whether the CLARITY Act moves forward depends on which set of numbers lawmakers choose to believe.