Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, has publicly challenged banking industry claims regarding stablecoin yields. He argues that concerns about a massive exodus of deposits from traditional banks lack empirical evidence.
In July 2026, 134 banking executives signed a letter advocating for stricter regulations on yield-bearing stablecoins. They warned of potential deposit outflows ranging from hundreds of billions to trillions of dollars, which they claim would reduce funds available for lending.
Witt highlighted inconsistencies in the banking lobby's stance, noting that they continue to push for broader restrictions under Section 10404 of the CLARITY Act, despite the legislation already prohibiting interest payments on payment stablecoins.
The advisor suggests that compliant stablecoins issued under the GENIUS Act could attract foreign capital into the US banking system. Meanwhile, legislative efforts involving Senators Tillis and Alsobrooks to reach a compromise on yield provisions remain unresolved.
