The White House Council of Economic Advisers determined on Wednesday that banning stablecoin yield would lift U.S. bank lending by just $2.1 billion, or 0.02% of total loans — a finding one Wall Street analyst warned will not soften community-bank opposition to the CLARITY Act.

TD Cowen's Washington Research Group told clients the road to passing crypto market-structure legislation has grown harder, not easier, in the wake of the report.

What did the White House report conclude?

Released Wednesday, the CEA study found that most stablecoin reserves cycle back into the banking system, with only a small portion effectively drained from lending activity. The 0.02% lending differential is the most conservative number circulated by any federal body on the yield question to date.

That figure sits in direct contrast to the trillions of dollars in deposit outflows bankers have projected in congressional testimony over the past year.

Why are banks pushing back?

Lobbyists for large and regional banks have told lawmakers that stablecoin rewards could trigger wholesale deposit migration and undermine their core lending franchise. TD Cowen said community banks are unlikely to accept the CEA's modeling assumptions and will continue to insist on language that explicitly bans yield to holders.

"As long as small banks view stablecoins as a threat to their future they will oppose crypto legislation unless it contains an explicit ban on stablecoin yield," wrote Jaret Seiberg, managing director of TD Cowen's Washington Research Group.

His note added that the report does not change his team's broader reading of the political obstacles facing the bill.

What is the proposed compromise?

Negotiators on Capitol Hill have been working on a framework that distinguishes between rewards earned through active use of a stablecoin and passive yield paid for simply holding the token. Senate staff had been expected to release draft legislative text on the yield question last week, but no document has surfaced, and parties are still negotiating behind closed doors.

Seiberg read the CEA report as a signal of President Donald Trump's preference: stablecoin yield should be permitted under the CLARITY Act. If that interpretation holds, the use-versus-holding compromise may not survive White House review.

What is the legislative outlook?

Seiberg said the path to passing the CLARITY Act becomes "even tougher than we have been discussing" if the compromise loses presidential support. He gave the bill roughly a one-in-three chance of clearing Congress this year, with enactment potentially slipping to 2027 and final rules taking effect no earlier than 2029.

The narrowing calendar leaves the Senate Banking and Agriculture committees with weeks to align the banking lobby, the administration's digital-asset policy team and stablecoin issuers before the year-end recess. Without agreement on yield, CLARITY will most likely remain parked in committee through 2025.