The American Bankers Association (ABA) is challenging a White House report that downplayed the impact of banning stablecoin yields on the banking sector. The ABA argues the report failed to address the primary concern: that attractive stablecoin yields incentivize deposit outflows, particularly from smaller community banks.
While the White House Council of Economic Advisers estimated a negligible impact on bank lending from a stablecoin yield ban, the ABA's economists stated the real issue is the potential for funds to move from community banks to larger institutions or directly into stablecoins. This shift, they contend, would increase funding costs for smaller banks and reduce local lending capacity. The ABA represents major financial institutions including JPMorgan Chase, Goldman Sachs, and Citigroup.