White House Stablecoin Talks Stall as Banks Fight to Ban Yield

TLDR

• Stablecoin yield clash stalls White House talks before March deadline
• Banks vs crypto divide blocks progress on stablecoin regulation
• Yield dispute derails U.S. stablecoin bill negotiations
• White House stablecoin talks freeze over reward bans
• Stablecoin regulation hits wall as banks demand yield limits

The latest White House meeting on stablecoin rules ended without agreement as banks and crypto firms maintained opposing positions. The talks again highlighted deep concerns about stablecoin yield and its impact on traditional funding models. The session closed with both sides preparing for further negotiations before the March 1 deadline.

Stablecoin Yield Dispute Blocks Progress

The meeting pushed discussions into technical areas, yet the gap on stablecoin yield remained wide. Banks demanded strict limits on any rewards tied to stablecoin activity and they insisted on tougher enforcement measures. Crypto leaders resisted these demands and they argued that a broad ban would weaken the digital dollar market.

Banks presented written “prohibition principles” that targeted passive and activity-based incentives and they wanted these rules in the Senate bill. Crypto groups countered that stablecoin use depends on flexible reward models, and they stressed the need for innovation. The debate underscored how regulation now shapes which stablecoin projects can operate.

The GENIUS Act created the current regulatory push, and it seeks to control stablecoin issuance while protecting bank deposits. Banks claimed that interest-bearing stablecoin products threaten liquidity systems, and they warned of possible deposit outflows. Crypto firms rejected this view, arguing that market growth depends on competitive on-chain options.

Banks Push Prohibition Principles While Crypto Firms Resist

Major U.S. banks requested a full ban on benefits connected to holding or using stablecoin products. They said even activity-based rewards could shift funds away from traditional channels, and they pressed for narrow exemptions. Crypto representatives opposed these limits, and they urged broader definitions of permissible stablecoin activity.

The meeting included executives from leading banks, and they emphasized the need for strict guardrails. Crypto groups responded with alternative proposals, and they sought a structure that still supports moderate stablecoin incentives. The exchange revealed how far both sides remain from a shared framework.

Participants noted that banks offered limited language allowing discussion of specific exceptions. Crypto groups said this shift showed progress, and they supported continued talks. Even so, both sides recognized that meaningful differences around stablecoin rewards persist.

Deadline Pressure Rises as Senate Considers Market Structure Bill

The White House aims to finalize stablecoin guidance before March 1, and staff from the Senate Banking Committee attended. Lawmakers want a unified position, and they seek clarity for supervising stablecoin issuers and platforms. However, the yield dispute has slowed progress on the broader market structure bill.

The House passed the CLARITY Act, and the Senate must now secure bipartisan agreement on stablecoin rules. Negotiators fear additional delays because Coinbase withdrew support due to yield prohibitions and this move weakened legislative momentum. Talks will continue, and the White House may schedule additional sessions.

The meeting demonstrated that both sides remain engaged, and they expect further negotiations soon. The administration wants resolution, and it hopes to prevent stalled legislation. Yet the core fight over stablecoin yield still defines the path forward.

The post White House Stablecoin Talks Stall as Banks Fight to Ban Yield appeared first on CoinCentral.