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

ME News update. On April 8 (UTC+8), the White House Council of Economic Advisers released a report titled “The Effects of a Stablecoin Yield Ban on Bank Lending.” The report states that, in the baseline calibration of the CEA model, after excluding stablecoin yields, bank lending increases by $2.1 billion, with a net welfare cost of $0.8 billion. This is equivalent to a 0.02% increase in lending, with a cost-benefit ratio of 6.6. Large banks will carry 76% of this additional lending, while community banks with assets below $10 billion will carry the remaining 24%. Based on the baseline forecast, this would result in community banks adding $0.5 billion in new lending, meaning their lending amount would grow by 0.026%. Even if all the worst-case assumptions are stacked together, the model can only predict that the total amount of bank lending in the fourth quarter of 2025 will increase by $531 billion, equivalent to a 4.4% growth in bank lending. To reach this figure, the ratio of the stablecoin market size to deposits would need to rise to about six times its current level, all reserves would need to be locked in the form of non-lendable cash rather than Treasury bonds, and the Federal Reserve would need to abandon its current monetary policy framework. Even under these unlikely conditions, community bank lending would increase by only $129 billion, equivalent to a 6.7% increase. Likewise, the conditions under which banning yields would deliver positive welfare effects are also difficult to achieve. In short, the ban on yields would have a negligible role in protecting bank lending, while also causing consumers to lose the competitive returns provided by holding stablecoins. (Source: Foresight News)