White House Study Downplays Stablecoin Yield Risks

White House economists released a study concluding that stablecoin rewards pose only a "quantitatively small" risk to bank deposits, a finding that challenges banking industry arguments [1]. The research suggests that banning such yield products would do little to improve bank lending or financial health [1]. This analysis emerges as Congress debates the CLARITY Act, legislation that has sparked a fierce lobbying campaign from banking groups [1].

Key takeaways

• White House economists characterize the risk of deposit flight due to stablecoin rewards as "quantitatively small" [1].
• The American Bankers Association claims yield-bearing stablecoins could grow to $2 trillion and reduce bank lending capacity by 20% or more [3].
• The CLARITY Act, which passed the Senate Banking Committee 15-9 on May 14, 2026, includes a contested provision allowing exchanges to pay activity-based rewards [3].
• The White House study determined that prohibiting stablecoin yield would not materially benefit bank lending capacity [1].

Banking Lobbyists Warn of Deposit Flight

The American Bankers Association (ABA) spent April and May running an emergency lobbying campaign to close what it calls the "stablecoin yield loophole" in the CLARITY Act [3]. The ABA estimates that yield-bearing stablecoins could grow the market from $300 billion to $2 trillion at the direct expense of bank deposits [3]. The group claims this shift could reduce lending capacity across consumer, small business, and agricultural sectors by 20 percent or more [3]. Industry advocates argue that banks are defending a profit model built on zero-yield checking accounts against a structurally superior alternative [3].

White House Economists Dispute Threat Level

In contrast, the White House study examined the potential impact of stablecoin reward programs on the broader banking sector [1]. Economists characterized the deposit flight risk as "quantitatively small," suggesting that even if stablecoin issuers were permitted to offer yield, the resulting shift of funds would not reach levels that threaten banking stability [1]. The study also determined that banning stablecoin yield products would do little to improve banks' financial health or support bank lending [1]. These findings effectively undercut the core premise of the banking lobbying effort: that stablecoin rewards threaten to siphon deposits away from banks and destabilize the traditional financial system [1].

Why it matters

The CLARITY Act cleared the Senate Banking Committee 15-9 on May 14, 2026, but the provision regarding rewards has become a major flashpoint between the crypto industry and U.S. banking groups [3]. While the 2025 GENIUS Act prohibits stablecoin issuers from paying interest to keep tokens as payment instruments, the CLARITY Act contains language that allows exchanges to pay activity-based rewards [3]. The White House findings arrive at a critical juncture in the regulatory debate, bolstering the crypto industry's stance as the legislation moves forward [1].