- Anthony Scaramucci says the expanded prohibition on yield-bearing stablecoins in the CLARITY Act weakens the U.S. dollar against China’s yield-bearing Digital Yuan.
- Scaramucci argued banks are blocking stablecoin yield to limit competition, making non-U.S. rails more attractive.
- Brian Armstrong warned that banning stablecoin rewards could reduce U.S. dollar competitiveness in foreign exchange markets.
- The People’s Bank of China now allows commercial banks to pay interest on Digital Yuan deposits, giving the Digital Yuan a yield advantage.
- Bank of America CEO Brian Moynihan said stablecoins could cause up to $6 trillion in bank deposit outflows, which could shrink bank lending capacity.
Anthony Scaramucci, founder of SkyBridge Capital, said the expanded prohibition on yield-bearing stablecoins in the CLARITY Act puts the U.S. dollar at a competitive disadvantage to China’s Digital Yuan. He framed the issue as a competition between yield-bearing and non-yield-bearing digital rails.
In a post, Scaramucci wrote that banks are blocking stablecoin yield to avoid competition with stablecoin issuers; he asked whether emerging countries would choose a rail with or without yield. According to his post, the policy shift hurts U.S. competitiveness. “The Banks do not want the competition from the stablecoin issuers, so they’re blocking the yield. In the meantime, the Chinese are issuing yield, so what do you think the emerging countries will choose as a rail system, the one with or without yield?”
The People’s Bank of China began allowing commercial banks to pay interest on digital yuan deposits in January, giving the Digital Yuan a yield feature that U.S. stablecoins would lack under the expanded ban.
Brian Armstrong, CEO of Coinbase, warned that banning yield on U.S. stablecoins undermines the dollar’s competitiveness in foreign exchange markets. He said, “I worry we are missing the forest through the trees in the US. Rewards on stablecoins will not change lending one bit, but it does have a big impact on whether US stablecoins are competitive,” and other industry leaders have voiced similar concerns about the ban.
The expanded prohibition in the CLARITY Act builds on limits first proposed in the GENIUS Act framework. During an earnings call, Bank of America CEO Brian Moynihan warned that stablecoins could drive as much as $6 trillion in bank deposit outflows, a shift that could reduce banks’ lending capacity.
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