The passage of the GENIUS Act in the United States during 2025 established a clear guideline for the treatment of stablecoins: the prohibition of paying direct interest or yield to holders. The rationale behind this measure is to prevent these digital assets from competing directly with traditional bank deposits, based on the hypothesis that a drain of liquidity toward stablecoins could restrict the financial system’s capacity to extend loans.
However, a recent report from the White House Council of Economic Advisers (CEA) has provided quantitative evidence that questions the magnitude of that impact. The report’s findings indicate that, even in scenarios where stablecoins offer competitive yields, the effect on U.S. bank credit is limited.
The Quantifiable Impact: A Matter of Scale
The numbers from the CEA analysis are precise and help frame the debate. According to its baseline calibration, eliminating stablecoin yield would result in an increase in bank lending of approximately $2.1 billion. In absolute terms, this figure represents just 0.02% of the total credit within the U.S. financial system.
Conversely, the same regulatory action would imply a welfare loss for stablecoin users estimated at $800 million. This asymmetry in the figures suggests that the economic cost imposed on users is significantly greater than the marginal benefit gained by the banking system as a whole.
The report does not deny the redistribution of money but clarifies its path regarding credit intermediation. According to the analysis, approximately 88% of the reserves backing major stablecoins remain invested in liquid and safe financial instruments, such as U.S. Treasury bills and repurchase agreements. In practice, only a fraction close to 12% of those funds remains truly outside the traditional financial intermediation circuit.
The Geographic Disconnect in Usage
The most relevant point for emerging economies lies not in the debate over U.S. bank credit but in the geographic distribution of these assets’ usage. Industry data and reports from the issuers themselves indicate that more than 80% of stablecoin transaction volume occurs outside U.S. borders.
This statistic is central because it reflects a fundamentally different motivation for use. While the U.S. regulatory discussion focuses on the competition between bank savings accounts and crypto-asset yields, adoption in Latin America responds to other needs.
In countries experiencing high inflation, recurring local currency devaluation, or limited access to traditional banking services, stablecoins function primarily as a mechanism for accessing the U.S. dollar and as a cross-border payment infrastructure. For an independent professional invoicing international clients, a small business paying suppliers in Asia, or a family receiving remittances, the priority is not obtaining an annual return of 3% or 4%. The core functionality lies in preserving capital value against local currency depreciation and reducing international transaction costs.
Implications for Regulatory Policy in Latin America
Given this landscape, the U.S. decision to focus its regulation on yield prohibition poses a challenge for Latin American regulators: Should the GENIUS Act approach be replicated, or is a region-specific framework necessary?
Copying the U.S. restriction without considering the local context could lead to different side effects than those intended. While the intention to protect financial system stability is valid in any jurisdiction, the risk in emerging economies stems less from competition for local bank deposits and more from pushing stablecoin activity toward unregulated platforms or foreign jurisdictions. A prohibition that does not align with local usage dynamics could result in a loss of visibility for financial supervisors without significantly altering user behavior.
In this regard, some countries in the region have begun to explore alternative paths. El Salvador, with its Digital Assets Issuance Law, provides an example of a distinct approach. This legislation establishes a framework for the regulated operation of digital assets, including stablecoins, without imposing direct restrictions on the economic incentives these instruments may offer. The Salvadoran approach prioritizes clarity on registration, custody, and reserve requirements, allowing market conditions to define the supply of yields.
Larger economies in the region, such as Brazil and Mexico, have opted for regulatory sandboxes or controlled testing environments. These spaces allow financial authorities to observe user and issuer behavior in a limited setting before enacting definitive legislation. This approach enables the collection of local empirical data, rather than basing decisions solely on theoretical models or the experiences of more mature financial markets.
Toward a Regulatory Framework Based on Local Evidence
The CEA report offers a lesson applicable beyond U.S. borders: the impact of stablecoins on traditional banking credit capacity is smaller than initial projections suggested. In Latin America, this finding should steer the discussion toward the more pertinent aspects of regional adoption.
A regulatory agenda for the region could be structured around the following pillars:
- Differentiating Transactional Use from Savings Use. Recognizing that in many Latin American countries, stablecoins address deficiencies in existing financial infrastructure (remittances, freelancer payments, currency hedging) rather than acting as direct substitutes for fixed-term deposits.
- Requiring Transparency on Reserve Composition. The discussion regarding yield is secondary to the necessity of ensuring that the assets backing stablecoins are liquid, safe, and verifiable through periodic audits.
- Avoiding Excessive Regulatory Fragmentation. Given that stablecoins operate on global networks, coordination among regional countries to establish common minimum standards could facilitate supervision without stifling cross-border utility.
The evidence provided by the U.S. Council of Economic Advisers moderates concerns regarding the impact of stablecoins on traditional bank lending. Simultaneously, global usage patterns confirm that yield is not the determining factor for the majority of users outside the North American market.
Latin America finds itself in a position to design its regulatory response based on its own economic reality. The central question for the region should not be how to replicate the yield prohibition established in the GENIUS Act, but rather how to integrate a payment technology already being utilized by a significant portion of its population and productive sector. The most effective response likely resides in regulatory frameworks that prioritize reserve transparency, anti-money laundering prevention, and interoperability, over restrictions that, according to available data, would have a limited impact on financial stability and a considerable cost in terms of user welfare.
