According to Foresight News , Sayee Srinivasan, chief economist of the American Bankers Association (ABA), and Yikai Wang, vice president of research, published an article criticizing the recent report on stablecoin payments released by the White House Council of Economic Advisers (CEA). The article points out that the core issue of the CEA's research is "the impact of prohibiting stablecoin interest payments on bank lending," while the truly important policy issue should be "whether allowing interest payments will accelerate the outflow of deposits from community banks."
The ABA argues that while the CEA's analysis uses the current stablecoin market size of approximately $300 billion as a benchmark, if the market expands to $1 to $2 trillion, interest-bearing stablecoins will become a core mechanism for accelerating deposit migration, rather than a negligible product function. At that point, the credit contraction effect will have a substantial impact at the state level. The article also points out that the "reshuffling" of deposits within the banking system is not without its harmful consequences. If funds flow from community banks to large institutions or stablecoin issuers, regions and industries reliant on relationship-based banking will face credit contraction. The ABA believes that prohibiting interest payments on stablecoins is a prudent policy safeguard, allowing stablecoins to develop as payment innovations rather than as a substitute for insured bank deposits.
