White House Digital Assets Council Executive Director Patrick Witt defends stablecoin yields against objections from the traditional banking sector.
Patrick Witt, Executive Director of the White House Council of Advisers on Digital Assets, has weighed in on the stablecoin yield debate, arguing that these instruments will bring new capital into the American banking system rather than drawing it away.
The statement comes as tensions between the crypto sector and traditional banks intensify around the US CLARITY Act, the legislative measure designed to provide clearer regulation for the industry.
In a post on X published Wednesday, Witt laid out his argument: “Foreigners exchange local currency for stablecoins issued by a U.S.-based issuer,” adding that “global demand for dollars is enormous.” “This represents net new capital entering the American banking system,” he wrote. Most U.S. stablecoin issuers hold U.S. dollars or Treasury securities as collateral backing each token issued.
Witt’s position stands in contrast to that of Standard Chartered, which in a recent research note estimated that growing stablecoin adoption could lead to a reduction in U.S. bank deposits “equal to one third of the stablecoin market capitalization.” Witt countered that what is often “missed” in discussions around the GENIUS Act and the CLARITY Act is how GENIUS Act-compliant stablecoins “will actually result in inbound deposit flows.”
