United States Council of Economic Advisers defends finding that a stablecoin yield ban would add only USD 2.1 billion to bank lending

The United States Council of Economic Advisers published a frequently asked questions document defending its April 2026 analysis that prohibiting stablecoin yield would have little effect on bank lending. Its baseline model estimates that a ban would increase lending by USD 2.1 billion, or 0.02%, while imposing an annual net welfare cost of about USD 800 million on households. The analysis addresses the policy debate over extending the GENIUS Act’s issuer-level yield prohibition to rewards offered through affiliates or third parties. Under the baseline assumptions, a ban would shift USD 54 billion from a USD 300 billion stablecoin market into commercial bank deposits, but only USD 6.5 billion would create marginal lending capacity. Community bank lending would rise by about USD 500 million, or 0.026%. The Council argues that stablecoin purchases generally transfer deposits among account holders and banks rather than remove them from the banking system, particularly when issuers hold reserves in bank deposits or Treasury bills. The FAQ tests assumptions proposed by trade groups and advocacy organizations through an interactive model. The largest estimated increase in lending is USD 531 billion, or 4.4%, but this requires stablecoins to reach roughly six times their current share of deposits, issuers to hold all reserves as locked cash, households to display extreme yield sensitivity and the Federal Reserve to abandon its ample-reserves framework. Under the same extreme assumptions but with ample reserves maintained, the estimated increase falls to USD 72 billion, or 0.6% of loans.