Trump’s crypto advisor says Stablecoin Yields Could Bring New Capital to US Banks

Stablecoin yield services could channel additional capital into the United States banking system, according to Patrick Witt, executive director of the White House Council of Advisors for Digital Assets.

In recent remarks, Witt argued that global demand for the US dollar remains strong and stablecoin markets may reinforce that demand rather than weaken it. He explained that international users often exchange their local currencies to purchase stablecoins issued by US-based companies.

Because these issuers typically hold reserves in US dollars or government securities such as US Treasuries, the process effectively brings additional capital into the American financial system. Witt described this inflow as new money entering US banks rather than funds leaving them.

Debate Over Stablecoin Yields and Bank Deposits

The comments come amid ongoing debate in Washington over proposed legislation such as the CLARITY Act, which aims to establish clearer regulatory rules for digital assets.

Some banking institutions have warned that expanding stablecoin use could reduce traditional bank deposits. Research from Standard Chartered suggested that growing stablecoin adoption might reduce US bank deposits by roughly one-third of the stablecoin market’s value.

Witt disagreed with that view, arguing that compliant stablecoins under frameworks such as the GENIUS Act could actually lead to deposit inflows as global users move funds into dollar-backed digital tokens.

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