White House economists: banning stablecoin rewards would barely boost bank lending and likely harm consumers

Economists at the White House Council of Economic Advisers concluded that banning crypto firms from offering yield on stablecoins would have a minimal effect on community-bank lending, estimating a boost to lending of about 0.02% under a prohibition scenario ^{[1] [2]}.

The report stated that the conditions required to show a net welfare gain from prohibiting stablecoin rewards are implausible and warned that a ban would impose significant costs on users while delivering only marginal benefits to banks, a point highlighted across coverage of the study ^{[3] [4]}.

The analysis adds to an ongoing policy debate between the banking industry and the crypto sector as lawmakers and regulators consider how to treat stablecoin products and related consumer protections ^[5].

White House economists recommended caution toward a categorical prohibition on stablecoin yields given the minimal projected uplift to bank lending and the potential consumer costs identified in their analysis ^[1].