A White House report tied to the CLARITY Act has opened a new clash between banks and crypto firms over stablecoin yield. Journalist Eleanor Terrett reported that banking sources rejected the report’s conclusions, saying it missed key funding risks. Released on April 8, the Council of Economic Advisers report said limits on stablecoin yield would not materially reduce deposit flight, a view that drew an immediate response from banking circles.
The dispute centers on how deposits change form
Banking sources argued that the issue is not only the level of deposits leaving the system. Their concern is the structure of those flows. In their view, even when stablecoin reserves return to banks, the deposits do not come back in the same form, and that shift can affect pricing, balance-sheet funding, and the way long-term lending is supported.
The White House report reached a different conclusion. It said restricting stablecoin yield would only marginally increase lending. Bankers pushed back, saying funding stability is the core issue. They stressed that deposit movements are not one-for-one transfers, and changes in funding mix can alter how credit is financed and deployed over time.
Smaller institutions are seen as more exposed
Banking groups also pointed to community banks and smaller institutions, which rely more heavily on stable retail deposits and have fewer alternative funding channels. If funds move toward stablecoins or larger banks, pressure on those institutions could build. They also argued that these effects may not show up right away in aggregate lending data.
That gap in interpretation has kept negotiations unsettled. Banking groups and crypto companies are reading the same report in very different ways, leaving the discussion around the CLARITY Act unresolved.
Coinbase welcomes the report while lawmakers seek clearer rules
On the crypto side, Coinbase Chief Policy Officer Faryar Shirzad described the report as a net positive. He said the findings support the view that stablecoins do not threaten community banks, and added that rewards remain important for consumer benefits.
Lawmakers are still pressing for clearer legislation. Senators Thom Tillis, Bill Hagerty, and Cynthia Lummis had requested the report to inform the debate. Treasury Secretary Scott Bessent also urged Congress to move quickly, citing limited Senate floor time.
According to the Wall Street Journal, Bessent warned that delays could weaken regulatory clarity. He also noted rising crypto adoption, saying that nearly one in six Americans owns digital assets. The argument over stablecoin yield, deposit flows, and the scope of future rules remains open.