Trump administration plans interactive tool to counter bank concerns over stablecoins: Report
The Council of Economic Advisers says a yield ban on stablecoins would barely dent bank lending, but community banks aren't buying it.
The Trump administration plans to roll out an interactive tool Tuesday in an attempt to defend landmark crypto legislation against banks’ concerns that stablecoin growth could trigger deposit flight from community banks, Chris Phelan, the Council of Economic Advisers’ chair, said in comments to Semafor.
The planned launch comes as the US Senate is set to hold a procedural vote today on advancing the bill, also known as the CLARITY Act, which would create a regulatory framework for digital assets and requires 60 votes to advance.
According to Phelan, the tool will let users set different parameters and run scenarios based on the Council of Economic Advisers’ conclusion that the data does not show a meaningful relationship between stablecoin growth and community bank deposit flight.
The administration is using the tool as it works to persuade Senate Republicans to move forward with the CLARITY Act despite opposition from banking groups.
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The bill’s fate is still uncertain despite a new version released by Senate Republicans on Sunday.
The new text includes stricter provisions on officeholder crypto interests, including allowing state attorneys general to enforce restrictions and requiring public officials to divest significant interests in crypto-focused companies or use a blind trust. It also attempts to address banks’ concerns over stablecoin rewards competing with deposits.
However, bank representatives said Monday that changes to the bill had not gone far enough on stablecoin provisions, while Republican Senator John Cornyn said he was not yet convinced that the latest text addresses community bankers’ concerns. Crypto-friendly Democrats have also criticized the bill’s revised ethics provisions.