White House council says ban on stablecoin interest would have minimal impact on banks

A potential ban on crypto firms paying interest to customers holding stablecoins would not have a meaningful impact on community banks, according to a recent report from the U.S. White House Council of Economic Advisers (CEA), as reported by Bloomberg. The CEA stated that such a ban would only lead to a minor increase in traditional bank lending, estimated at around $2.1 billion, or 0.02%. It noted that this increase would largely be concentrated among major banks rather than community ones. The council concluded that the measure would be largely ineffective in protecting banks and could result in consumers losing out on competitive returns. This issue is a point of contention between the banking and crypto industries amid ongoing debates in the U.S. Congress over a market structure bill known as the Clarity Act.