Anthony Scaramucci, the founder of SkyBridge Capital, has voiced concerns that the prohibition of yield-bearing stablecoins in the United States could weaken the U.S. dollar's competitive standing. According to Scaramucci, such restrictions would put the U.S. at a disadvantage compared to nations like China, which is developing a yield-bearing central bank digital currency (CBDC).
Scaramucci articulated his views on X, stating that banks are attempting to stifle competition by blocking stablecoin yields. He suggested that countries that permit yield-bearing stablecoins might be more successful in attracting adoption, particularly in emerging markets.
The debate around stablecoin regulation has intensified with the proposed CLARITY Act. The Act's language, as interpreted by some, would effectively ban passive yield on stablecoins. Coinbase CEO Brian Armstrong has publicly opposed the CLARITY Act over concerns that the language used in the bill would ban passive yield on stablecoins, and give banks an advantage over crypto companies. Armstrong argued that the bill would undermine the American people. TD Cowen analysts also believe the act is "negative for crypto and positive for banks" and that it could derail legislation in Congress.
Conversely, Bank of America CEO Brian Moynihan has cautioned that yield-bearing stablecoins could trigger significant deposit outflows from traditional banks, potentially reaching $6 trillion. Moynihan warned that this shift could negatively impact small businesses, leading to reduced lending and increased borrowing costs. JPMorgan executives have also expressed similar concerns in the past.
The Senate Banking Committee recently postponed a planned markup hearing for the CLARITY Act, further underscoring the divisions and complexities surrounding stablecoin regulation. The White House also considered dropping its support for the bill after Coinbase withdrew its support. This legislative uncertainty adds to the ongoing debate about the future of stablecoins and their role in the financial system.
The clash between traditional finance and the burgeoning crypto industry is evident in this debate. Armstrong pointed out the disparity between the low interest rates offered by banks (approximately 14 basis points) and the potential earnings from stablecoin rewards (up to 3.8%). This difference highlights the competitive pressure that stablecoins could exert on traditional banking models.
