Economists at the Council of Economic Advisers have expressed opposition to proposals that would prevent crypto platforms from offering yields on stablecoin deposits, as discussions around the Clarity Act intensify.
The group, which operates within the executive office of the White House, stated that restricting yield offerings would not significantly strengthen community banks or improve lending conditions. Instead, they argued that such a ban would reduce consumer benefits without delivering meaningful financial system gains.
In its statement, the council noted that the conditions required to justify a positive economic outcome from prohibiting yield are unlikely to exist. It further explained that banning yield would do little to support bank lending while removing the advantage of competitive returns for stablecoin holders.
The debate is part of a broader conflict between traditional banking interests and the crypto industry. Lawmakers are considering how to address this issue through the Clarity Act, which could either prohibit third party rewards on stablecoins or formally regulate them as permitted financial products.
Recent drafts of the legislation have suggested restricting crypto platforms from offering any form of stablecoin rewards, whether directly or indirectly, including structures that resemble interest bearing deposits. The goal of that approach is to eliminate regulatory loopholes and prevent crypto firms from replicating traditional banking products.
The latest position from the Council of Economic Advisers contrasts with those proposals, highlighting ongoing divisions as the policy discussion continues to develop.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
