"The White House Council of Economic Advisers built a model to test the claim, and the results are striking. Simply put, 'a yield prohibition would do very little to protect bank lending, while forgoing the consumer benefits of competitive returns on stablecoin holdings.'"
"At current conditions, banning stablecoin yield would increase bank lending by just $2.1 billion - a 0.02% change against a $12 trillion loan book. The welfare math runs in the other direction: consumers would lose $800 million more in forgone returns than borrowers would gain from slightly lower rates."
"The cost-benefit ratio the White House CEA calculated was 6.6 - meaning the policy costs more than six times what it delivers."
The GENIUS Act mandates stablecoin issuers to maintain one-to-one reserves and prohibits yield payments. Advocates argue that competitive yields could harm bank funding, particularly for community banks. However, the White House Council of Economic Advisers found that banning stablecoin yields would only increase bank lending by $2.1 billion, while consumers would lose $800 million in potential returns. The cost-benefit analysis indicates that the policy is inefficient, costing more than six times its benefits, suggesting that the prohibition may not be justified.
Read at Bitcoin Magazine
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