Stablecoin Yield Ban Would Offer Little Shield to Bank Lending, White House Says
A White House analysis finds that prohibiting yields on stablecoins would have only a modest impact on bank lending. Baseline results show removing stablecoin yield increases lending by about $2.1 billion with a net welfare cost of $800 million (0.02% lending rise; 6.6 to 1 cost-benefit). Large banks would supply about 76% of the new lending, with community banks around 24% (~$500 million, 0.026%). Even under extreme, implausible assumptions, aggregate lending rises to at most $531 billion (4.4%), only if the stablecoin market expands sixfold and the Fed rethinks its monetary framework; community banks could still gain up to $129 billion (6.7%). The report concludes the yield ban would do little to protect bank lending while sacrificing potential consumer benefits from competitive yields.
