CLARITY Act: Banking Member Opposes White House Report On Stablecoin Yield

The banking industry has opposed the White House report on stablecoin yields, which indicated that stablecoin rewards will have little negative impact on banks amid concerns about deposit flight. However, despite this pushback from the banks, there are signs that a deal on the stablecoin yield text may be close, though issues such as Ethics may pose an obstacle to the CLARITY Act’s progress.

Banking Member Pushes Back On White House’s CLARITY Act Study

In an X post, journalist Eleanor Terrett stated that early reactions in banking circles suggest that the White House report on stablecoin yields missed the mark, citing a banking source she spoke with. This comes as the banking and crypto industry continue to clash over the stablecoin yield text in the crypto bill.

The banking industry had claimed that stablecoin yield could lead to $6.6 trillion in deposit outflows. However, the White House report by the Council of Economic Advisers found that concerns about stablecoin rewards posing a deposit flight risk are “quantitatively small.” The report also noted that banning stablecoin rewards in the CLARITY Act will do little to boost bank lending.

However, Terrett noted that bankers have said that it has never been simply about needing more deposits to lend. Instead, “It’s about outflows, particularly from smaller institutions. The issue is more about how shifts in deposits shape how lending is funded, priced, and how stable it is over time,” she said.

Citing these bankers, she also noted that community banks rely more heavily on stable retail deposits and have fewer funding alternatives. As such, if yields on stablecoins trigger deposit outflows, these community banks will be the first to feel the impact, even if aggregate lending remains unchanged.

Additionally, the banking member told Terrett that bank deposits don’t move 1:1, countering the White House CLARITY Act study, which finds that most stablecoin reserves will recirculate into the banking system. The banks argue that these deposits don’t always return in the same form and that losing stable retail funding can affect credit funding and deployment.

Coinbase Backs White House’s Report

Coinbase’s Chief Policy Officer, Faryar Shirzad, stated that the White House CLARITY Act report is a net positive for banks. “The facts matter, and it’s good to see the Council of Economic Advisors confirm that stablecoins aren’t a threat to community banks,” he said.

According to Terrett, the Coinbase executive also noted that stablecoins are a big win for consumers and a big opportunity for banks. “Rewards are critical to preserving those benefits,” he added. Meanwhile, Coinbase is also urging Congress to pass the crypto bill quickly.

“It’s time to pass the Clarity Act,” Coinbase CEO Brian Armstrong said in an X post. He was reacting to a post from U.S. Treasury Scott Bessent, who also urged Congress to pass the crypto market structure bill.

Armstrong also expressed appreciation to all the bipartisan work among Senators and staff over the past several months to make the CLARITY Act a “strong bill.”This signals that the banking and crypto industries are close to reaching a deal on the stablecoin yield text.