CLARITY Act: Banking Member Opposes White House Report On Stablecoin Yield

A White House report released today has drawn immediate pushback as the CLARITY Act debate over stablecoin yield continues. Banking sources rejected the findings, arguing they miss key funding risks. The report from the Council of Economic Advisers addressed deposit flight concerns, which lawmakers have debated for months.

CLARITY Act: Stablecoin Yield Findings Opposition

According to journalist Eleanor Terrett, that conclusion has had opposition from some banking members. According to Terrett, a banking source said the analysis “missed the mark” on core concerns. The source stressed that deposit levels alone do not define the issue. Earlier, a white house report suggested that the stablecoin yeilds do not impact bank deposits at considerable scale. 

Instead, banks focus on how funds move, especially from smaller institutions. The CLARITY Act debate now is on funding stability rather than aggregate lending figures. Bankers argue that shifts in deposits affect pricing and long-term funding structure.

This distinction has been key to ongoing negotiations between banks and crypto firms. As discussions progress, both sides continue to interpret the report differently. The disagreement now shapes the broader policy direction under the CLARITY Act.

Bankers on Funding Risks and Deposit Shifts

However, bankers emphasized that outflows, not lending capacity, drive their concerns. Smaller institutions, in particular, rely heavily on stable retail deposits. As a result, any migration toward stablecoins or larger banks could create pressure.

The source explained that deposits do not move in a direct one-to-one manner. While the report notes that stablecoin reserves often return to the banking system, bankers said the form changes. 

This, they argued, alters funding stability even if total deposits appear unchanged. These new findings and opposition come as crypto and banking leaders are still optimistic about the CLARITY Act deal.

Also, community banks lack diverse funding alternatives compared to larger institutions. Therefore, losing retail deposits could affect how credit is deployed. The source added that such changes may not immediately show in aggregate lending data.

This distinction remains critical in ongoing CLARITY Act negotiations. It indicates deeper concerns about long-term funding stability rather than short-term lending metrics.

Coinbase Chief Policy Officer View

Meanwhile, Coinbase Chief Policy Officer Faryar Shirzad offered a contrasting view. According to Terrett, Shirzad described the White House report as a “net positive” for banks. He stated that stablecoins do not threaten community banks.

Shirzad also emphasized consumer benefits tied to stablecoin rewards in the CLARITY Act. He added that incentives remain critical for maintaining those benefits. His comments followed ongoing advocacy efforts from Coinbase on yield-bearing stablecoins.

Additionally, Shirzad referenced earlier analysis supporting stablecoins as an opportunity rather than a risk. This stance aligns with Coinbase CEO Brian Armstrong’s prior position on market structure debates.

The report comes amid a prolonged standoff in the Senate. Lawmakers including Thom Tillis, Bill Hagerty, and Cynthia Lummis had pressed for its release. Their request aimed to guide negotiations between banking and crypto stakeholders.

However, sources close to those talks remain cautious. According to Crypto in America, two individuals familiar with the CLARITY Act process expressed optimism but shared limited details.