White House Official: Banks Don’t Need to Fear Stablecoins

▲ The White House and Stablecoin / ChatGPT-generated image

A White House digital asset policy official dismissed concerns that the introduction of stablecoin regulation would trigger a drain of liquidity from the banking sector, clarifying the possibility of coexistence with the traditional financial system.

According to cryptocurrency-focused outlet Bitcoinist on February 15 (local time), Patrick Witt, Executive Director for digital asset policy at the White House, recently stated that fears raised within the banking sector regarding stablecoin yield programs are exaggerated. In an interview with Yahoo Finance, Witt emphasized that stablecoin reward systems do not pose an existential threat to the traditional banking system and stressed that banks have sufficient capacity to offer innovative products similar to those of digital asset firms to their customers.

The U.S. cryptocurrency market structure bill currently under discussion in Congress seeks to delineate the authority of the Securities and Exchange Commission and the Commodity Futures Trading Commission and to establish legal definitions for digital assets. Witt explained that disputes surrounding rewards and interest paid to stablecoin holders have become a major factor delaying the legislation. He added that “banks and the digital asset industry can find solutions to the reward structure through compromise,” underscoring the need for negotiations to close regulatory gaps.

The banking sector has expressed concern that stablecoin yield programs could attract large volumes of deposits, potentially undermining the foundations of traditional finance. In response, Witt noted that some major banks are already pursuing licenses from the Office of the Comptroller of the Currency and exploring stablecoin-style account services. He argued that the stablecoin system is not simply siphoning bank deposits but rather expanding financial service options, and that conflicts could be resolved if both sides launch complementary products.

As midterm elections approach, policymakers and the digital asset industry share a sense of urgency that the window for passing the bill is narrowing. Treasury Secretary Scott Bessent warned that bipartisan cooperation could collapse if Democrats regain control of the House, urging that the bill be passed by this spring. Witt assessed that only once a clear regulatory framework is in place can substantial sidelined institutional capital flow into the market, enabling the digital asset ecosystem to take a significant leap forward.

The White House plans to make every effort to finalize the legislation before the fall election season intensifies, aiming to secure both consumer protection and financial system stability. Led by Witt, the digital asset policy team is actively working to craft a balanced compromise between banks’ concerns over deposit protection and the innovation demands of digital asset companies. Once legal certainty is established, the digital asset market is expected to be recognized as a formal part of the institutional financial system and enter a new phase of growth.

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