An interesting development is unfolding in the U.S. — the banking industry has seriously clashed with the White House over stablecoins and their yields.

Here's the gist: American banks, represented by the American Bankers Association, strongly disagree with the conclusions of the Council of Economic Advisers' report. The White House claims that if stablecoins are prohibited from generating income, bank lending will only increase by $21 billion. Bankers argue that this is an incorrect analysis of the issue.

In their view, the real problem lies elsewhere. If people and companies start earning good interest on stablecoins, they will massively transfer their funds out of banks. This particularly affects regional banks — capital will flow into large financial institutions, leading to higher financing costs and a reduction in local loans. The chief economist of the American Bankers Association, Sai Srinivasan, and Vice President Ikai Van directly point to this threat.

The American Bankers Association does not deny that financial incentives are a powerful tool. Yes, people will move their funds to where they get higher returns. That makes sense. But that is precisely why banks see high-yield stablecoins as a serious threat to their stability.

Overall, the cryptocurrency sector and the banking industry are now actively negotiating the terms of the Senate bill. The issue of banning interest payments on stablecoins remains one of the main points of disagreement. By the way, as the crypto ecosystem develops — from major platforms like MagicEden to financial instruments — it becomes clear that this conflict of interests will only intensify. Banks understand that alternative financial tools are becoming increasingly attractive to ordinary citizens.