Clarity Act Push Grows as White House Flags Yield Ban

White House has released an analysis report which suggests that efforts to ban yield on stablecoins will do little to protect bank lending, even as Congress pushes forward with once-in-a-generation crypto regulation like the GENIUS and CLARITY Acts. This release was highlighted by well-known crypto journalist Eleanor Terrett on her X page today, April 8, 2026.

🚨JUST IN: The White House Council of Economic Advisers has released its study on stablecoin yield and its potential impact on deposit flight and bank lending — the same report I noted last month that Senate Banking lawmakers were pressing the White House to release.

The TLDR:…

— Eleanor Terrett (@EleanorTerrett) April 8, 2026

The Council of Economic Advisers (CEA) memo, which is titled as “Effects of Stablecoin Yield Prohibition on Bank Lending”, used a simple model to see how people split money between stablecoins and banks after the GENIUS Act.

According to the report, banning yield on stablecoins makes them less attractive, and hence people will move about $54.4 billion back into bank deposits, where the investors can still earn some interest. This will give banks slightly more money to lend, and it will increase the lending by $2.1 billion which is just 0.02%.

However, users lose better earning opportunities from stablecoins, and since the push to lending is small, the overall result is nothing but a net loss of about $800 million per year.

How This Helps Shape the CLARITY Era

The paper has been released at a time when the GENIUS Act requires stablecoins to be fully backed by safe assets like US Treasuries and fed deposits, but does not completely remove all ways issuers can offer indirect yield.

Meanwhile, the CLARITY Act is still under discussion, and is stuck in the US Senate Banking Committee. The main reason for the delay is due to disagreements between lawmakers over stablecoin yield rules.

The lawmakers are also looking at how strict crypto regulations should be and whether oversight should fall under securities or commodities regulators. Banks, on the other hand, are pushing for tighter control over crypto but the crypto firms are pushing toward a more flexible oversight. As of now, the bill is not rejected but remains paused as policymakers work toward a compromise.

What the Paper Says About the Worst-Case

In the report, the CEA also looked at the worst case scenario, where stablecoins grow at a very large rate (for example 10% of all bank deposits), rules force their reserves to sit idle (not used for lending), and the total lending only increases by about $531 billion (which is up by 4.4%). This means that the number is actually much smaller than what some bank groups had warned about.

For community banks, the gain is still limited, just about a 6.7% increase in lending, not the massive impact which was being feared by many.

So the takeaway from this worst case scenario is simple, that banning yield is not going to be that effective or be an efficient solution to protect bank lending. However, this whole study is supporting a smarter approach where rules are balanced, fixed and focused on managing risk properly rather than using blanket bans (exactly what CLARITY Act is aiming for).

In a yield-regulated system shaped by the CLARITY Act and insights from the Council of Economic Advisers, the biggest winners would be regulated stablecoin platforms, large banks, and institutional investors as they gain a clear and safer way to offer and access yield. Examples include USDC, USDT, and RLUSD.

On the other hand, risky high-yield schemes and unregulated platforms would lose out, as the rules would get more stringent and would limit or shut down opaque ‘reward-style’ payouts.

CEA Findings Ease Pressure on Lawmakers

The CEA findings basically suggests that stablecoins do not pose as a threat to the banks and will have a limited impact on bank lendings. This eases earlier concerns about large-scale deposit outflows.

This also helps reduce regulatory tension among lawmakers debating the CLARITY Act, as the data shifts the discussion away from outright restrictions and more toward structured oversight.

With the perceived risk to traditional banking appearing smaller than expected, policymakers may find it easier to focus on building clearer, risk-based rules rather than defending strict yield bans.

Also Read: Donald Trump Accuses Banks of Blocking Clarity Act in Crypto Push