Anthony Scaramucci and Brian Armstrong argue that prohibiting stablecoin rewards is less about financial stability and more about protecting incumbent banks from competition, which could potentially push emerging markets toward alternative monetary rails. The concerns come as China allows interest on digital yuan deposits. Yield Ban Weakens Dollar Competitiveness Anthony Scaramucci warned that the prohibition on yield-bearing stablecoins in the United States’ proposed CLARITY Act could weaken the global competitiveness of the US dollar, particularly as China accelerates adoption of its yield-bearing digital currency. Speaking in response to the legislation, Anthony Scaramucci argued that banning stablecoin rewards reflects deeper structural problems in the US financial system and risks ceding influence to rival monetary rails. Scaramucci said the restriction on crypto exchanges and service providers offering yield on stablecoins under the CLARITY Act is designed to protect incumbent banks from competition rather than safeguard financial stability. In his view, traditional banks are resisting stablecoin issuers because yield-bearing digital dollars could draw deposits away from the banking system. He contrasted this approach with China’s strategy, and asked why emerging markets would choose a payments and settlement rail that offers no yield when alternatives do. That comparison gained urgency after the People’s Bank of China began allowing commercial banks to pay interest on digital yuan deposits in January, effectively making China’s central bank digital currency more attractive for savers and institutions. Similar concerns have been raised by Brian Armstrong, the chief executive of Coinbase. Armstrong warned that prohibiting yield on US-based stablecoins undermines the dollar’s position in foreign exchange markets by making it less competitive than China’s digital yuan. He argued that stablecoin rewards would not materially change lending dynamics but would play a major role in determining whether dollar-denominated stablecoins can compete internationally. Armstrong and other industry leaders described the yield ban as a deliberate effort to choke off competition in order to shield the traditional banking sector. The issue has become even more contentious as the CLARITY Act expands on restrictions first introduced in the GENIUS Act, which set out a regulatory framework for US dollar stablecoins. While lawmakers and regulators frame the measures as necessary to protect financial stability, critics argue they risk stifling innovation at a moment when global competition over digital money is intensifying. Bank of America CEO Brian Moynihan also said during a recent earnings call that widespread adoption of stablecoins could trigger as much as $6 trillion in deposit outflows from traditional banks. Such a shift, he warned, could greatly reduce the banking industry’s capacity to lend.
