The White House published an executive summary modelling the effects of prohibiting interest or yield on stablecoins, concluding that a yield ban would do little to protect bank lending and would come with net welfare costs. The analysis is set against the GENIUS Act’s requirements for stablecoin issuers to maintain one-to-one reserves made up of specified high-quality liquid assets, and its prohibition on issuers offering yield, while noting that affiliate or third-party arrangements are not explicitly barred and could be tightened under some variants of the proposed CLARITY Act. Under the baseline calibration of the CEA model, eliminating stablecoin yield increases bank lending by USD 2.1 billion (0.02%) but generates a net welfare cost of USD 800 million, implying a cost-benefit ratio of 6.6. Large banks account for 76% of the additional lending, while community banks with assets below USD 10 billion account for 24% (about USD 500 million, or a 0.026% increase). Even under “worst-case” stacked assumptions, incremental lending reaches USD 531 billion (4.4% of bank loans as of 2025Q4) only if the stablecoin market grows to roughly six times its current size as a share of deposits, reserves are locked in unlendable cash rather than Treasuries, and the Federal Reserve abandons its current monetary framework; community bank lending rises USD 129 billion (6.7%).
The White House 2026-04-08
The White House analysis finds stablecoin yield bans would barely increase bank lending and would impose net welfare costs
The White House released an executive summary modelling the impact of prohibiting interest or yield on stablecoins under the GENIUS Act, finding a yield ban would marginally increase bank lending but impose net welfare costs. Under the Council of Economic Advisers model, eliminating stablecoin yield raises bank lending by USD 2.1 billion (0.02%) at a net welfare cost of USD 800 million, with large banks capturing 76% of the additional lending and community banks 24%. Even under “worst-case” assumptions, substantial lending gains require a stablecoin market about six times its current size, reserves held in unlendable cash, and changes to the Federal Reserve’s monetary framework.