CEA Defends Finding That Stablecoin Yield Ban Barely Affects Lending

The White House Council of Economic Advisers ("CEA") published an FAQ defending its April 2026 paper, "Effects of Stablecoin Yield Prohibition on Bank Lending," against objections from bank trade groups and consumer advocates.

The paper examined the GENIUS Act, which requires one-to-one reserves and bars issuer-paid yields but not affiliate or third-party yield arrangements the proposed Digital Asset Market Clarity Act could address. CEA argued that a yield prohibition on stablecoins "would do very little to protect bank lending, while forgoing the consumer benefits of competitive returns on stablecoin holdings."

The FAQ rebutted critiques from a number of bank trade groups and advocacy organizations, among them the American Bankers Association, the Independent Community Bankers of America, and Americans for Financial Reform. CEA argued that each relied on partial-equilibrium reasoning, mistook deposit outflows for destroyed deposits rather than shifted holdings, or stacked extreme assumptions that cannot hold simultaneously.