A yield ban on stablecoins would lift bank lending by just $2.1 billion, White House report finds

A yield ban on stablecoins would increase total bank lending by $2.1 billion, or 0.02% of outstanding loans, according to a White House Council of Economic Advisers report released April 8. The finding undermines a core banking industry argument that restricting interest-like returns on stablecoin balances is necessary to preserve bank funding and expand credit.

The report assessed the potential effects of extending yield restrictions beyond stablecoin issuers to platforms and affiliates—a move backed by traditional banks but opposed by crypto firms. Under its baseline model, the lending boost would be negligible. Even under more aggressive assumptions favoring the banking sector, total lending would rise by a maximum of $531 billion, or 4.4% of projected 2025 fourth-quarter loan volumes. Community banks, defined as those with under $10 billion in assets, would see a best-case gain of 6.7% in lending capacity.

76% of the baseline lending increase would flow to the largest banks. The report concluded that a yield prohibition would do very little to protect bank lending while eliminating consumer benefits from competitive stablecoin returns.