While crypto insiders participating in the White House Crypto Meeting this week struck a notably positive tone following the gathering, the banking sector has been less sanguine on the discussion.
As was reported yesterday, the American Bankers Association (ABA) has dug in on no interest or yield for stablecoin holders – a top disagreement between the two sides.
Also issuing a statement was the Independent Community Bankers of America (ICBA). This association was more vague, or perhaps diplomatic, in their statement. The ICBA stated:
“We want to thank the administration for hosting today’s constructive conversation and for recognizing the importance of the banking industry’s perspective on market structure legislation. As we shared in the meeting, we must ensure that any legislation supports the local lending to families and small businesses that drives economic growth and protects the safety and soundness of our financial system. Banks of all sizes will continue to work with lawmakers, the White House, and other stakeholders to help develop thoughtful, effective policy around digital assets.”
The allusion to lending reflects ongoing concern about deposits migrating to stablecoins, given the potential for higher yields than those offered by a typical savings account. Most banks make their money from holding other people’s money while paying little in return, and then lending out these funds at a far higher rate.
Of course, banks could adjust their rates to better compete while participating in the stablecoin sector. This simple fact should cause policymakers to support the crypto advocates over banks, which fear additional competition.