Ekaterina 💎

🚨Ahead of today’s 2:15 CLARITY vote, the White House @CEA47 has some inconvenient math for the bank lobby — and even built an interactive model for those for whom math isn’t their strong suit (like, apparently, said bank lobby). The banks want Congress to go further than GENIUS’s *existing ban on issuer-paid yield* and *also ban all stablecoin rewards from other intermediaries too,* a compromise which was carefully negotiated in CLARITY already. The shrill calls by the bank lobby that mass deposit flight will allegedly happen absent congressional action was modeled and unambiguously disproven by CEA earlier this year, and this examines the counterfactual. (And lest we forget, if CLARITY fails, the GENIUS status quo, which they claim is intolerable, will remain.) So, let’s play this out — What happens if the banks get their way, and ban rewards, and kneecap stablecoins? 1) Bank lending rises … 0.02%. 😂 That’s $2.1B in CEA’s baseline. Community banks get $500M—a whopping 0.026% increase. (For reference, current community banks deposit base is $2.3T.) **Large banks, meanwhile get 76% of the additional lending.** So much for the community bank rescue mission — community banks are the unwitting stooges here for the very big banks who are *actually* squeezing their margins and gobbling them up. And those big banks just want to maintain their hegemony against any and all competitors (while they issue their very own stablecoins!) 2) Consumers pay for it. CEA estimates a net welfare loss of $800M/year. Costs exceed benefits 6.6 to 1. What a great deal! Thank you banks! 3) “But what if stablecoins get MUCH bigger?” CEA ran that too. A $3.7T stablecoin market, holding reserve composition and the Fed’s framework constant: roughly $20B in additional lending. Still under 0.2%. 4) “But deposits disappear!” Buying a stablecoin doesn’t make money evaporate. When an issuer buys a Treasury bill, the seller gets the deposit. It changes hands. The only way money leaves the deposit system is if you’re sticking it under your mattress. Don’t believe me? Use the interactive model to find out for yourself. Congress should probably check the math before taking away Americans’ rewards. And market participants should focus on competing, not lobbying for monopolies. whitehouse.gov/research/2026…