For months, we’ve been told stablecoin rewards threaten community banks by draining deposits and reducing lending. The Council of Economic Advisers @CEA47 just tested that claim again. The answer is the same: the costs outweigh the lending benefits for consumers 6.6 to 1. Banning stablecoin rewards increases bank lending by just 0.02% — including about $500 million for community banks. Meanwhile, CEA estimates the prohibition imposes a net welfare cost of roughly $800 million a year. The losers? Everyday Americans and business. So what has this fight really been about? Big banks have enormously valuable incumbent economics to protect. They sit at the center of the traditional payments system. And while no one begrudges banks earning money by putting deposits to productive use, banks can also earn billions simply by holding reserves at the Fed — paying customers little while collecting interest from the government, without financing a single loan. Stablecoins challenge both of those incumbent economics. This has always been about protecting the big banks’ payments franchise and protecting the billions they can earn on customer money parked at the Fed. It was never about protecting community-bank lending.