At the CEA’s baseline, banning stablecoin yield lifts bank lending by $2.1 billion, or 0.02% of total loans.
- The White House launched an interactive tool on Tuesday letting users run the model behind its stablecoin yield paper.
- Several Republicans, including Senator John Cornyn, could side with the banks, the report said.
- The Senate votes Tuesday afternoon on whether to take up the bill, which needs 60 votes to advance.
The White House launched an interactive tool on Tuesday designed to undercut the banking industry’s central objection to the Digital Asset Market Clarity Act (CLARITY Act), hours before the Senate votes on whether to take up the bill.
According to the White House, the tool runs the model behind a Council of Economic Advisers (CEA) paper that found banning stablecoin yield would do little for bank lending.
At the CEA’s baseline, a ban lifts lending by $2.1 billion, or 0.02% of total loans, with community banks accounting for $0.5 billion of that. The model puts the net welfare cost at $800 million a year, meaning the cost outweighs the benefit by 6.6 to one.
White House Targets Bank Lobby
The tool arrives as the administration makes a final push before the vote on Tuesday. CEA Chair Chris Phelan told Semafor that the tool would let users “set the parameters, run the scenarios” and reach the agency’s conclusion themselves.
He also told Semafor that an earlier CEA report found no meaningful relationship between stablecoin growth and community bank deposit flight. The new website will also carry an FAQ on the report and responses to its critics.
Patrick Witt, executive director of the President’s Council of Advisers for Electronic Assets, told Semafor the data did not support the “deposit flight narrative” bank lobbyists are pushing about stablecoin rewards. The bill had safeguards for community banks in case of a flight of deposits, and banks got none of those protections if the bill failed, Witt added.
Republicans May Side With Banks
The push followed a letter from 8 banking groups on Monday that recent changes to the bill’s stablecoin provisions did not go far enough, Semafor reported.
Several Republicans have signaled they could vote no on Tuesday afternoon, according to the outlet. Senator John Cornyn (R-TX) told Semafor on Monday night he was not sure the latest text addressed the issues concerning community bankers, and said he was looking forward to seeing where the votes are.
Crypto-friendly Democrats have separately objected that the revised ethics provisions do not go far enough in restraining President Donald Trump, according to the report. Senate Majority Leader John Thune (R-SD) told Semafor the picture looked poor a week ago and that he would see whether that had changed. The Senate votes on Tuesday afternoon on whether to take up the bill, which needs 60 votes to advance.
COIN And CRCL Fall
Ahead of today’s Senate vote, both Coinbase Inc. (COIN) and Circle Internet Group (CRCL) slipped in premarket.
COIN stock fell over 4% during premarket trading hours. On Stocktwits, the retail sentiment around COIN remained in the ‘bearish’ zone, while the chatter levels rose to ‘normal’ from ‘low’ levels in the last 24 hours.
Likewise, CRCL stock also fell by over 4% during pre-market trading hours. On Stocktwits, the retail sentiment around CRCL dipped to ‘bearish’ from ‘extremely bearish’ zones, while chatter remained at ‘low’ levels over the past 24 hours.
Read also: PURR Stock: Compass Point Calls For 63% Upside, HYPE Treasury Bet Nears $2.5B
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