The proposed ban on yield-bearing stablecoins in the US CLARITY Act is drawing sharp criticism from financial and crypto industry leaders, who argue it could undermine the global position of the US dollar. Among the most vocal critics is Anthony Scaramucci, founder of SkyBridge Capital, who says the restriction risks ceding ground to foreign digital currencies.
Stablecoin Yield and Global Currency Competition
Scaramucci argues that prohibiting yield on US dollar-backed stablecoins makes them less attractive compared to alternatives such as China’s Digital Yuan, which now allows interest-bearing deposits. He warns that global users, particularly in emerging markets, will naturally favor digital payment rails that offer yield, accelerating adoption of competing systems.
“Removing yield removes a core incentive,” Scaramucci said, adding that traditional banks are resisting competition from stablecoin issuers rather than protecting consumers.
Major crypto executives share this view. They contend that stablecoin rewards do not meaningfully alter lending risks, but play a significant role in determining whether US-based stablecoins remain competitive in foreign exchange markets. Without yield, demand could shift toward state-backed digital currencies offering built-in returns.
Armstrong said that;
The expanded yield prohibition builds on earlier legislation and reflects growing concerns within the banking sector. Some banking leaders have warned that stablecoins could trigger trillions of dollars in deposit outflows, reducing banks’ ability to lend.
Critics argue that blocking stablecoin yield may protect banks in the short term but weaken the dollar’s digital future, at a time when global competition for monetary influence is intensifying.
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