#WhiteHouseTalksStablecoinYields

the Battle for the Future of Crypto Heats Up

Stablecoins have officially moved from the crypto niche to the center of Washington power struggles. The White House has convened a series of intense, closed-door meetings aimed at breaking the deadlock over the CLARITY Act, with the core dispute focusing on one question: Should stablecoin holders be allowed to earn yield?

Why the Fight?
At the heart of the debate is a potential seismic shift in the financial landscape. Banking groups are fiercely opposing yield-bearing stablecoins, arguing they would function like bank deposits without the same regulations. They warn this could drain billions from the traditional system—Standard Chartered estimates $500 billion in deposits could leave U.S. banks by 2028 . On the other side, crypto firms argue that banning rewards stifles innovation and consumer choice, keeping the advantage with incumbents .

The State of Play: Compromise or Collapse?
Recent meetings have revealed a significant divide. Following a session on February 2 that ended without a deal , a second round of talks occurred this week. White insiders describe them as "collaborative working sessions," but the banking side remains dug in, arguing in a recent position paper that any form of yield is unacceptable .

The White House Position
President Trump’s crypto advisor, Patrick Witt, is acting as the mediator, urging both sides to find a compromise by the end of February . Witt has tried to calm banking fears, stating publicly that banks shouldn't feel threatened, as they can also offer stablecoin products once they obtain the proper OCC charters . However, Treasury Secretary Scott Bessent has acknowledged the banking perspective, noting that "deposit fluctuation is very undesirable" .

A Possible Path Forward?
The crypto industry, through groups like the Digital Chamber, has signaled a major concession: they are willing to give up "static holding rewards" (like savings account interest) to secure a deal. However, they are holding the line on protecting rewards for specific activities like providing liquidity or ecosystem participation, which are crucial for DeFi .

The Clock is Ticking
With the 2026 mid-term elections approaching, the window for passing the CLARITY Act is "rapidly closing," according to Witt. If Democrats were to win the House, the current negotiations could be rendered moot . More meetings are expected next week.

The outcome of these talks won't just define the CLARITY Act; it will determine whether stablecoins remain simple payment tools or evolve into the next generation of yield-bearing financial products. All eyes are on the White House