{"id":143361,"date":"2026-04-08T14:11:51","date_gmt":"2026-04-08T14:11:51","guid":{"rendered":"https:\/\/daddyofincome.com\/index.php\/2026\/04\/08\/white-house-economists-say-stablecoin-rewards-wont-harm-banks\/"},"modified":"2026-04-08T14:11:51","modified_gmt":"2026-04-08T14:11:51","slug":"white-house-economists-say-stablecoin-rewards-wont-harm-banks","status":"publish","type":"post","link":"https:\/\/daddyofincome.com\/index.php\/2026\/04\/08\/white-house-economists-say-stablecoin-rewards-wont-harm-banks\/","title":{"rendered":"White House Economists Say Stablecoin Rewards Won\u2019t Harm Banks"},"content":{"rendered":"

The post White House Economists Say Stablecoin Rewards Won\u2019t Harm Banks<\/a> appeared first on Coinpedia Fintech News<\/a><\/p>\n

White House economists have pushed back against claims that stablecoin rewards<\/a> could damage the traditional banking system. A new report from the Council of Economic Advisers says banning stablecoin yields would have only a minimal impact on bank lending, suggesting fears from banking groups may be overstated.<\/p>\n

Stablecoin Rewards Unlikely to Drain Bank Deposits<\/h2>\n

According to a White House report titled<\/a> \u201cEffects of Stablecoin Yield Prohibition on Bank Lending,\u201d banning rewards on stablecoin balances would have only a small impact on banks.<\/p>\n

It would increase lending by just 0.02%, or about $2.1 billion, which is minimal compared to the overall banking system.<\/p>\n

The analysis also found that most of this increase would benefit large banks. About 76% of the additional lending would come from major institutions, while community banks would account for the remaining 24%. <\/p>\n

In dollar terms, smaller banks would add around $500 million in loans, representing only a 0.026% rise.<\/p>\n

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BREAKING:<\/p>\n

White House economists say stablecoin rewards won\u2019t hurt banks.<\/p>\n

Even banning yields would only increase lending by about 0.02%, per Bloomberg. pic.twitter.com\/Y98SnceENd<\/a><\/p>\n

— Crypto Rover (@cryptorover) April 8, 2026<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Overall, the findings suggest that stablecoin rewards are unlikely to significantly drain deposits from banks, easing major concerns.<\/p>\n

Report Counters Banking Industry Warnings<\/h2>\n

Some banking groups previously warned that stablecoins offering rewards could lead to major deposit outflows. One estimate suggested banks could lose up to $1.3 trillion in deposits and $850 billion in loans.<\/p>\n

However, the White House economists said such outcomes appear unlikely. Even under extreme assumptions, the model showed total additional bank lending reaching $531 billion, equal to about a 4.4% increase. But this scenario would require the stablecoin market to grow to six times its current size, alongside major changes to monetary policy.<\/p>\n

The report noted that these conditions are unrealistic, making the risk to banks limited.<\/p>\n

Consumer Benefits Could Be Lost With a Ban<\/h2>\n

Economists also warned that banning stablecoin rewards could harm users. Stablecoin programs often offer competitive returns compared to traditional bank deposits.<\/p>\n

For example, some platforms currently offer around 3.5% rewards on stablecoin balances. Removing such incentives could reduce competition and limit consumer choice.<\/p>\n

The report concluded that prohibiting yields would do little to protect bank lending while eliminating potential benefits for users.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

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