A second White House meeting between major U.S. banks and leading crypto firms ended without a deal on stablecoin yield, leaving one of the most contentious issues in U.S. digital asset regulation unresolved.
The February 10 session, led by Patrick Witt, Executive Director of the President’s Crypto Council, focused on whether stablecoin issuers should be allowed to offer yield or rewards to holders.
While participants described the talks as more detailed than previous discussions, no compromise was reached. The outcome keeps the proposed Digital Asset Market Clarity Act of 2025, known as the CLARITY Act, stalled in the Senate Banking Committee.
Stablecoin Yield at the Center of the Dispute
At the heart of the disagreement is whether stablecoin rewards resemble bank interest and, if so, should face similar restrictions.
Banking representatives from Goldman Sachs, JPMorgan, Bank of America, Wells Fargo, Citi, PNC, and U.S. Bank argued that yield-bearing stablecoins could trigger large-scale deposit outflows from traditional banks.
Banks presented a written set of “prohibition principles” calling for a ban on “any form of financial or non-financial consideration” offered to stablecoin holders. They contend that allowing such rewards could undermine lending capacity and disrupt the traditional deposit model.
Crypto firms, including Coinbase, Ripple, a16z, Paxos, and the Blockchain Association, pushed back. They argue that stablecoin rewards are a core feature of on-chain finance and necessary for fair competition with traditional financial products.
Industry representatives also said overly restrictive rules could slow innovation or drive activity outside the United States.
CLARITY Act Remains in Limbo
The debate over stablecoin yield has become a key obstacle for the CLARITY Act, which aims to define regulatory oversight for digital assets and clarify the roles of the SEC and the CFTC. The bill passed the House in 2025 but has not advanced in the Senate due to unresolved concerns around stablecoin regulation.
Although banks maintained a firm stance, participants noted a shift in tone. For the first time, banking representatives signaled limited openness to discussing potential exemptions for transaction-based rewards. However, disagreements over what qualifies as “permissible activities” remain unresolved.
The White House has urged both sides to reach an agreement by March 1 to preserve legislative momentum. Further discussions are expected in the coming days, though it is unclear whether another full-scale meeting will be held before the deadline.
Until a compromise is reached, stablecoin regulation and broader reform of the U.S. crypto market structure remain in a holding pattern.
Cover image in ChatGPT, BTCUSD chart on Tradingview
