A new White House analysis has cut into one of the banking industry’s main arguments in Washington: that banning yield on stablecoins is necessary to protect lending. The study says the benefit to U.S. banks would be minimal, while consumers holding tokenized dollars would lose meaningful returns. That finding is now feeding directly into Senate negotiations over the Digital Asset Market CLARITY Act.
According to the White House Council of Economic Advisers, removing yield from stablecoins would raise total U.S. bank lending by only $2.1 billion, or about 0.02% of outstanding loans. The tradeoff, in the council’s estimate, would be a net household welfare loss of roughly $800 million. The report says a yield ban would do very little to protect bank credit and would strip away the consumer benefit of competitive returns on stablecoin balances. Of the added lending, about 76% would come from large banks, while community banks with less than $10 billion in assets would account for the remaining 24%, or roughly $500 million.
Bank groups and crypto advocates are using the same debate very differently
The American Bankers Association rejected the White House framing and said the administration was asking the “wrong question.” The group warned that allowing yield-bearing stablecoins to scale would squeeze net interest margins and tighten credit for small businesses. Crypto advocates, by contrast, have pointed to the CEA figures as evidence that a blanket prohibition has little economic basis.
The dispute is unfolding as the global stablecoin sector has grown to more than $280 billion, with tether and USD coin still dominant. In practical terms, the argument over yield-bearing “digital cash” has become one of the sharpest fault lines in U.S. digital-asset legislation.
Senate talks continue as yield language remains unsettled
Negotiators are still working through the bill’s treatment of yield. A Senate draft circulated in March would have banned passive yield on stablecoin balances, whether offered directly or indirectly, and allowed only narrowly defined rewards tied to specific activity. Industry groups argued that the structure was crafted to satisfy bank demands.
Coinbase chief legal officer Paul Grewal recently told Fox Business that negotiators were “very close to a deal” on the issue. A White House crypto adviser also said the compromise taking shape around yield “seems to be intact” as the bill moves toward markup. The Senate Banking Committee, though, has not yet announced a markup date.
Support from Treasury and SEC raises the stakes for the bill
Treasury Secretary Scott Bessent and SEC Chair Paul Atkins have both publicly backed the CLARITY Act. That alignment between the administration and market regulators is unusual, and it adds pressure on the Senate to move before the 2026 election calendar makes major legislation harder to pass.
If enacted, the CLARITY Act would become the first comprehensive U.S. market-structure law for digital assets. The measure would formalize the division of authority between the SEC and CFTC, tighten rules around stablecoin reserves and yield features, and could alter how large volumes of tokenized assets are cleared and settled on-chain.