White House Pushes Banks and Crypto Toward Stablecoin Deal
- Banks warn stablecoin yields may drain deposits and disrupt the traditional financial system.
- Crypto firms seek approval to offer interest products while keeping regulation talks alive.
- Lawmakers push for compromise before February ends to revive stalled crypto legislation
The White House will hold a second meeting on Tuesday afternoon to push banks and crypto firms toward a compromise on stablecoin yields. The dispute has stalled progress on the CLARITY Act and intensified tensions between both sectors. Officials aim to narrow differences after an earlier closed-door session ended without agreement on whether digital asset firms may offer interest on stablecoins.
That unresolved issue remains central because banking groups warn that yield-bearing stablecoins could trigger large deposit outflows. Crypto firms continue to seek permission to offer interest products linked to stablecoins. As a result, lawmakers and regulators face mounting pressure to deliver a workable framework before the end of February.
Government officials will act as mediators during the talks. They will try to balance financial stability concerns with demands for regulatory clarity. One question now hangs over the talks: can both sides agree on stablecoin yields without derailing broader crypto legislation?
Focus Shifts to Technical Compromise Talks
Like the first meeting, Tuesday’s session will involve senior staff and trade groups rather than top executives. Fewer participants from each industry will attend, according to Crypto in America. The narrower format aims to keep discussions focused on practical solutions.
Negotiators will concentrate on technical details tied to a possible compromise. These include liquidity requirements, reserve standards, jurisdictional authority, and consumer protections. Officials hope these elements can form the basis of acceptable language for lawmakers.
Banks continue to raise concerns about deposit volatility. Crypto firms continue to press for flexibility to offer interest-bearing stablecoins. The talks seek to address both positions without expanding the scope beyond stablecoin yields.
Banks and Crypto Firms Face Deadline Pressure
Both camps now face pressure to deliver a compromise proposal by late February. Any progress could determine whether pending crypto legislation advances in Congress. Without movement, the CLARITY Act remains blocked in the Senate.
According to a Bloomberg report last week, crypto firms have floated new proposals to ease tensions with banks. These plans would give community banks a larger role in stablecoins, including custody of reserve funds. They also include potential joint ventures to issue bank-backed digital currencies.
Banking groups have previously resisted these measures. They argue that interest-bearing stablecoins could resemble deposits without meeting banking standards. As a result, they have withheld support for the bill until yield rules become clearer.
Related: White House Advisor Slams Coinbase Over Crypto Bill Exit
Market Volatility Adds Urgency to Talks
The staff-level summit continues a series of unsuccessful efforts to bridge policy gaps between traditional finance and crypto firms. Authorities again aim to settle whether crypto platforms can provide interest-bearing stablecoin products.
Pressure inside the administration has increased amid recent digital asset market volatility. Bitcoin and Ethereum prices fell sharply during recent market swings. Demand for clearer regulatory processes has grown as a result.
Officials believe prolonged uncertainty increases systemic risk. They also see the stablecoin debate as a test case for wider crypto market oversight. Without agreement, regulatory gaps may persist.
Key Players and Legislative Stakes
The meeting includes major financial institutions such as JPMorgan Chase, Bank of America, and Wells Fargo. Crypto firms and trade groups from Coinbase, Ripple, and Circle will also take part.
These discussions directly affect the CLARITY Act of 2025. The bipartisan bill cleared key House steps but stalled in the Senate. Banking opposition tied to stablecoin yields remains the main obstacle.
White House officials and members of the presidential crypto advisory team have said resolving this dispute is a top priority. They view stablecoin yield rules as the final barrier to moving the bill through the Senate Banking Committee.
