Unresolved Stablecoin Yield Debate in White House Meeting Leaves Regulatory Issues Unanswered
In a significant yet unresolved gathering, key figures from major U.S. banks and leading cryptocurrency companies met for a second time at the White House. The focus of this meeting was the contentious issue of stablecoin yield, a topic that remains a sticking point in the broader landscape of U.S. digital asset regulatory framework.
White House Discussions: A Stalemate on Stablecoin Yield
Hosted by Patrick Witt, the Executive Director of the President’s Crypto Council, the meeting on February 10 aimed to explore whether stablecoin issuers should have the right to offer yields or rewards to their holders. Although the discussions were more comprehensive than previous attempts, no consensus was achieved. This impasse leaves the proposed Digital Asset Market Clarity Act of 2025 (CLARITY Act) in a state of suspension within the Senate Banking Committee.
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Core of the Dispute: Stablecoin Yield and Traditional Banking
The primary contention revolves around the similarities between stablecoin rewards and traditional bank interest, raising questions about whether they should be subjected to comparable regulatory restrictions. Representatives from major financial institutions such as Goldman Sachs, JPMorgan, Bank of America, Wells Fargo, Citi, PNC, and U.S. Bank voiced concerns that yield-bearing stablecoins could cause significant withdrawals from conventional banks.
These banks proposed a set of “prohibition principles” to bar any financial or non-financial incentives to stablecoin holders. They argued that these rewards could destabilize lending capabilities and challenge the traditional deposit framework.
On the other hand, cryptocurrency firms like Coinbase, Ripple, a16z, Paxos, and the Blockchain Association countered these arguments. They maintained that stablecoin incentives are fundamental to on-chain financial ecosystems and essential for maintaining competitiveness with traditional financial products. Industry leaders further warned that overly stringent regulations might impede innovation or drive crypto activities offshore.
CLARITY Act: Stalled Progress and Legislative Challenges
The unresolved issue of stablecoin yield has become a significant obstacle for the CLARITY Act, which seeks to clarify regulatory oversight for digital assets and delineate the responsibilities of the SEC and the CFTC. While the bill successfully passed the House in 2025, it has not progressed in the Senate due to lingering concerns about stablecoin regulation.
Despite the banks’ firm positions, some participants noticed a subtle shift in their approach. For the first time, banking representatives showed limited willingness to discuss potential exceptions for transaction-based rewards. Nevertheless, disputes over what activities should be deemed “permissible” remain unsettled.
The White House has urged both parties to reach a resolution by March 1 to maintain legislative momentum. Although further discussions are anticipated, it is uncertain if another comprehensive meeting will take place before the deadline.
Until a resolution is found, stablecoin regulation and broader reforms of the U.S. cryptocurrency market structure continue to be on hold.
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