- The American Bankers Association (ABA) is responding to the White House Council of Economic Advisers’ (CEA) report on the payment of stablecoins.
- A statement from the AMA criticizes the CEA for slowing major changes.
- All this is fueling the debate surrounding the Clarity Act.
The White House Council of Economic Advisers (CEA) had just released a report on payments, and now the big banking groups are pushing back. The American Bankers Association (ABA) responded today and argued that regulators are missing a major risk.
According to the ABA, stablecoins with high yields can draw more capital from community banks and make them more expensive to operate and reduce their ability to provide local loans.
The answerwritten by chief financial officer Sayee Srinivasan and VP Yikai Wang, suggests that CEA is focusing on the wrong issue. The CEA report specifically examines whether restricting interest rates (yields) on stablecoins would slightly increase bank lending.
The report that came out, estimated the amount at $1.2 billion. However, the ABA believes that this concept is too narrow and does not reflect what would happen in the market.
On the contrary, ABA shows a very violent situation. If stablecoins start providing productivity and be attractive to users, then their market size will increase. When this happens, more money will move away from traditional banks and into the digital assets that have been said.
The Argument for Limiting Yields Debates Between the Soundness of the Push Process
The debate is growing in Washington as legislation surrounding stablecoins takes place. Prior to White House expressed support for reducing yields under the Clarity Act, banks will provide a response today, April 13, 2026.
In the statement, the ABA warned, “By focusing on the consequences of the ban, the CEA paper may create a false sense of security by avoiding a more extreme scenario: stablecoins paying yields grow faster.”
Banks are urging lawmakers to review the money that comes out of banks if stablecoins that offer returns are widely accepted.
Community Banks Face an Immediate Squeeze
His response also highlighted that community banks rely on local deposits to lend to families and small businesses. If the stablecoins that pay the yield attract the money, the banks will not change easily.
In addition, these banks will have to rely on low-cost financing such as the improvement of the Federal Home Loan Bank System or capital markets, which raise the cost of borrowing for customers.
Even if all deposits throughout the system are stable, the results are inconsistent. The ABA says the local economy could take a hit, estimating borrowing in states like Iowa could drop by $4.4-8.7 billion if stablecoins rise significantly.
Cooperation in Migration Risks, Gaps in Banking Analysis
There is a great deal of agreement between companies and academic research on one important point which is that yield makes stablecoins more attractive, encouraging people and businesses to withdraw money from banks, unless the law prohibits it.
The American Bankers Association says the money is intended to keep large lenders from returning to smaller banks, reducing their lending power.
It also criticizes the White House Council of Economic Advisers for treating the banking system as a single entity. Instead, the shift in deposits benefits the big banks, leaving the smaller banks struggling and increasing the risk of local credit defaults.
ABA Flags Narrow Banking Risk as Stablecoin Debate Deepens
The ABA also warns that these stablecoins can also act as “narrow banking”, where money is held in a depository but does not support actual lending. This concern is similar to why policy makers pushed back on Central Bank Digital Currency, fearing that it could weaken the flow of credit in the economy.
Because of this, the ABA says that restricting yields on stablecoins is not a problem but a practical approach. It would allow stablecoins to grow as payment instruments without directly competing with bank deposits.
As legislation progresses through Congress, including under the Clarity Act, this debate highlights the stark difference between crypto companies and traditional banks.
A Final Thought
The bank’s push from the ABA could delay the Clarity Act because with this solution, lawmakers must also consider deposit outflows. With the important list scheduled for the 16th, the debate may intensify before a final decision is reached. Although it does not prevent progress, however, it may lead to more discussions, changes and negotiations, which may change the Clarity Act’s timeline depending on how quickly an agreement is reached.
Also Read: US Crypto Clarity Act Faces Heavy Pressure Amid Senate Delays
