Overview
- The Council of Economic Advisers, which released its 21‑page analysis Wednesday, estimates a ban would lift total bank lending by $2.1 billion, equal to 0.02% of loans.
- Most stablecoin reserves are invested in Treasury bills and similar assets that get redeposited at banks, so conversions rarely shrink system‑wide deposits, and only about 12% of reserves sit in cash that can constrain lending.
- Large banks would capture about 76% of any lending bump, with community banks getting roughly 24% or around $500 million, undercutting industry warnings that small lenders face severe losses.
- The model finds a net welfare cost of about $800 million from a full ban because consumers lose yield without a meaningful gain in credit access.
- Current law blocks issuers from paying interest under the GENIUS Act, while the CLARITY Act debate now centers on closing third‑party reward workarounds that firms like Coinbase support keeping, and Senate timing for a markup remains uncertain.