A White House Council of Economic Advisers study published on April 8, 2026 found that banning stablecoin yield would increase total U.S. bank lending by just $2.1 billion, or 0.02%, while imposing an $800 million net welfare cost on consumers, delivering a cost-benefit ratio of 6.6 to 1 against the ban. The findings land as the Senate prepares to mark up the Digital Asset Market Clarity Act, where the question of whether intermediaries can offer stablecoin rewards has become a central sticking point.
What the White House Study Says About Stablecoin Yield Restrictions
The CEA report examined what would happen if the yield prohibition already written into the GENIUS Act were fully enforced. Under baseline assumptions, eliminating stablecoin yield would push $2.1 billion back into the banking system, a rounding error against the roughly $12 trillion U.S. commercial lending market.
Large banks would capture 76% of that additional lending. Community banks would receive the remaining 24%, equal to roughly $500 million, or a 0.026% increase in their loan books.
The report acknowledged that the GENIUS Act bars stablecoin issuers from paying yield directly but noted that affiliate or third-party interest-bearing arrangements are not explicitly prohibited. That gap is exactly what the Senate CLARITY debate aims to resolve.
Why the Case for a Stablecoin Yield Ban Looks Weaker
Even when the CEA stacked worst-case assumptions, including the stablecoin market growing roughly six times as a share of deposits, reserves being locked in cash, and the Federal Reserve abandoning its current framework, the model produced only $531 billion of additional aggregate lending, or 4.4% of the total.
That worst-case figure requires conditions that do not currently exist. Treasury Secretary Scott Bessent said on April 15, 2026 that the stablecoin market sits at around $300 billion and could grow tenfold by decade-end under the GENIUS Act. Even that aggressive growth trajectory falls short of the six-fold deposit-share expansion the worst case demands.
The Independent Community Bankers of America offered a starkly different model. ICBA said on April 13 that allowing crypto intermediaries to pay interest on payment stablecoins would reduce community-bank lending by $850 billion because industry deposits would fall by $1.3 trillion.
“Failing to extend the prohibition of yield and interest on payment stablecoins would severely damage the locally based economic growth.”
— Rebeca Romero Rainey, ICBA
The gap between the White House baseline of $2.1 billion in added lending and ICBA’s $850 billion loss estimate reveals that the Senate fight is fundamentally about model assumptions on future scale and deposit substitution, not settled economics.
How the Study Raises the Stakes for CLARITY in the Senate
The GENIUS Act bans issuer-paid yield but still allows third-party platforms such as exchanges to offer stablecoin rewards. That loophole is now the central battleground in the Senate’s CLARITY markup, where some variants would close the third-party channel entirely, according to Cointelegraph reporting on the negotiations.
With the White House’s own economists concluding that a yield ban delivers minimal lending gains at a steep welfare cost, senators pushing for a broad prohibition face a harder evidence burden. The 6.6 cost-benefit ratio hands opponents of the ban a concrete number to cite in markup debates.
For stablecoin issuers and DeFi platforms, the outcome will determine whether yield-bearing products, similar to the regulated crypto product structures emerging in Europe, can legally operate in the U.S. market. The regulatory clarity question extends beyond stablecoins into broader digital asset oversight, a theme that has driven recent industry gatherings including Paris Blockchain Week 2026.
If CLARITY closes the third-party yield channel, exchanges and wallets would need to restructure reward programs or exit the U.S. stablecoin market. If it preserves the current GENIUS Act gap, the $300 billion stablecoin sector could continue growing with yield as a competitive feature, though concerns about consumer protection in the crypto space would remain a factor for regulators.
The Senate Banking Committee has not announced a markup date for CLARITY, but the White House study ensures that any yield-ban provision will face sharper scrutiny when it reaches the floor.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
