Stablecoin Yield Debate Continues as White House Talks End Without Resolution
White House talks between banks and crypto leaders ended without agreement on stablecoin yield rules, leaving the Clarity Act stalled as negotiations over digital asset regulation continue.
Discussions between U.S. banking leaders and crypto industry representatives over stablecoin rewards remain without a formal resolution, leaving a key digital asset bill stalled in Congress.
The closed-door session, hosted by the White House crypto council, focused on whether companies issuing or distributing dollar-pegged stablecoins should be permitted to offer interest or yield to holders. The issue has emerged as the primary obstacle to advancing the Clarity Act, legislation designed to define regulatory boundaries between federal agencies overseeing digital assets.
According to multiple reports, banking representatives circulated a document (leaked to reporters) calling for a broad prohibition on providing financial or non-financial incentives tied to holding or using payment stablecoins. The proposal would bar companies from offering interest-like benefits and would grant regulators authority to enforce compliance, including penalties for violations.
The position goes beyond the most recent draft of the Clarity Act, which would prohibit passive interest payments on stablecoin balances but allow narrower, activity-based incentives under defined conditions.
Participants in the meeting included major financial institutions such as JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, and Wells Fargo, alongside digital asset firms and trade groups including Coinbase, Ripple, the Blockchain Association, and the Crypto Council for Innovation.
Banking groups have argued that allowing stablecoin issuers or platforms to pay interest could shift deposits away from traditional financial institutions, potentially affecting lending capacity, particularly among regional and community banks. In a joint statement, the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America said policy should support innovation without undermining deposit stability.
Crypto industry representatives have maintained that stablecoin rewards are an important mechanism for driving adoption and expanding use cases for dollar-backed digital assets. Executives from several digital asset firms described the meeting as constructive and said discussions remain ongoing.
The broader legislative effort builds on the GENIUS Act, signed last year, which established a federal framework for regulating dollar-pegged stablecoins. Lawmakers had hoped to advance the Clarity Act before the midterm elections, but markup hearings have been postponed amid continued negotiations.
Treasury Secretary Scott Bessent has publicly urged progress on the legislation, describing regulatory clarity as necessary for the digital asset sector’s development.
Negotiations are expected to continue as lawmakers and industry stakeholders work to reconcile differences over the scope of permissible stablecoin incentives.
