White House Economists Say Stablecoin Rewards Won’t Harm Banks

Banning crypto firms from offering customers yield on stablecoins would not have a meaningful effect on community banks, White House economists said in a report on Wednesday — marking the latest development in a fierce conflict between the two industries that has stalled legislation in Congress.

Prohibiting such rewards would only boost traditional lending marginally — by 0.02%, or $2.1 billion — most of which would come from large banks rather than community lenders, according to the report by the Council of Economic Advisers.

“The conditions for finding a positive welfare effect from prohibiting yield are simply implausible,” the ...