The U.S. White House Council of Economic Advisers released a report on stablecoin yields, with limited impact on bank loans.

ME News Report, April 8 (UTC+8), the U.S. White House Council of Economic Advisers released a report titled “The Impact of Stablecoin Yield Bans on Bank Lending.” The report states that, in the baseline calibration of the CEA model, after excluding stablecoin yields, bank loans increase by $2.1 billion, with a net welfare cost of $800 million. This corresponds to a 0.02% increase in loans, with a cost-benefit ratio of 6.6. Large banks will bear 76% of this additional lending, while community banks with assets below $10 billion will bear the remaining 24%. According to baseline forecasts, this will lead to an additional $500 million in loans for community banks, meaning their loan volume will grow by 0.026%. Even when stacking all worst-case assumptions, the model can only predict total bank loan growth of $531 billion by Q4 2025, equivalent to a 4.4% increase. To reach this figure, the stablecoin market size as a proportion of deposits would need to grow about sixfold from current levels, all reserves would need to be locked in non-loanable cash rather than government bonds, and the Federal Reserve would have to abandon its current monetary policy framework. Even under these unlikely conditions, community bank loans would only increase by $129 billion, a 6.7% growth. Similarly, conditions that would prevent yield from generating positive welfare effects are also difficult to realize. In short, banning yields has minimal impact on protecting bank loans and would also cause consumers to lose the competitive returns from holding stablecoins. (Source: Foresight News)