WASHINGTON (April 14, 2026) — Progressive Policy Institute (PPI) Senior Fellow Paul Weinstein, Jr., released the following statement in response to a recent report by the President’s Council of Economic Advisors (CEA) on stablecoin yield and its impact on bank lending:
“Despite the Trump Administration’s support for Crypto, a recent study by the President’s Council of Economic Advisors (CEA) undermines the argument that yield-bearing stablecoins won’t reduce community lending, particularly to small businesses, farms, and underserved areas.
“When Congress passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act last summer, the law prohibited the payment of interest by stablecoin issuers. The intent was to prevent the draining of deposits from traditional banks and create a regulatory structure for using stablecoin as a payment processing tool. However, the GENIUS Act, while prohibiting yield payments from stablecoin issuers, did not explicitly bar intermediaries from offering yield-like rewards to holders of the coins.
“Most studies, including one by the Federal Reserve last year, have found that increased adoption of stablecoin would significantly impact the banking sector by draining deposits from banks and thereby reducing lending to communities. In a cynical attempt to cloud the results of these studies, the CEA has tried to make an inverse argument, claiming that a complete prohibition on stablecoin yield would only increase bank lending marginally. Even if correct, two things can be true: that a prohibition on yield would not significantly increase lending by banks, but allowing stablecoins to offer interest would significantly increase deposit outflows from banks
“By not directly addressing the impact of yield-bearing stablecoin on bank deposits and lending, the CEA has only further validated the argument that the yield loophole created by the GENIUS Act needs to be closed.”
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us at @PPI.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
