The White House is set to host another closed-door session on February 10 as it tries to break a standoff over U.S. crypto regulation. The talks come after a February 2 meeting ended without a deal, even though bank groups and crypto groups said the discussion was useful. The fight has slowed the CLARITY Act, a major crypto market structure bill that cleared the House in July 2025 and still needs a path through the Senate.
At the center of the dispute is one question: can a stablecoin pay interest or other rewards to the person who holds it? That question has turned stablecoin policy into the main roadblock for the wider bill. Lawmakers and lobbyists can agree on many rules for crypto trading and registration, but they keep returning to stablecoin rewards.
A stablecoin is a digital token that aims to hold a steady price, often by staying close to one U.S. dollar. People use a stablecoin to move money fast, trade crypto, and park funds without leaving the blockchain. Many stablecoin issuers say they back each stablecoin with reserves like cash and short-term U.S. Treasury bills. In the GENIUS Act framework, stablecoin reserve rules and public disclosures became a key focus, with the goal of making a stablecoin easier to trust.
Now a newer product is pushing the debate further. A yield-bearing stablecoin is a stablecoin that shares part of its earnings with users. The issuer may earn money on reserves, then pass some of that return back as stablecoin interest or stablecoin rewards. Crypto firms say this feature helps users and helps them compete. Banks say it looks like a deposit product, but without the same guardrails.
Bank leaders warn that stablecoin interest could pull money out of insured bank deposits. Deposits are a main funding source for many banks. If customers move cash into a stablecoin to chase stablecoin interest, banks fear they could face faster outflows during stress. Banks also argue that stablecoin issuers do not face the same capital rules, liquidity rules, and supervision that banks face. In their view, stablecoin interest creates a form of parallel banking that could grow fast outside the usual safety net.
Crypto firms push back and call a ban on stablecoin interest anti-competitive. They say a stablecoin is not a bank account and should not be forced into the same model. They argue that stablecoin interest is a normal result of holding reserves that earn yield, and that users should share in that value. They also say stablecoin interest helps recruit new customers, since rewards make it easier to try a stablecoin for payments, trading, or saving. Some crypto executives warn that if the U.S. blocks stablecoin interest, more stablecoin activity will move offshore, and the next wave of digital finance will be built elsewhere.
That split is why the White House has stepped in. The talks are being run through the administration’s crypto policy effort, with the goal of getting both sides to draft compromise language. People familiar with the first meeting said it did not settle the stablecoin issue, and Reuters reported it ended without agreement. The next session is expected to include more senior executives, including leaders from large banks and top crypto companies.
A compromise, if it comes, may rely on limits instead of a full ban. One option is to allow stablecoin interest only under strict rules, such as clear reserve requirements, tight custody rules, and strong disclosure. Another option is to restrict who can offer stablecoin interest, or how a stablecoin can market rewards, to avoid confusing a stablecoin with a bank deposit. Lawmakers could also add consumer protection rules so users understand the risks, including what happens if a stablecoin issuer fails and how redemptions work under pressure.
The clock matters. The White House has signaled it wants movement soon, and lawmakers face a crowded schedule. If the CLARITY Act stalls longer, it could lose momentum and leave crypto regulation stuck in the same patchwork that firms complain about today. For banks, the stakes are about deposits, funding, and stability. For crypto, the stakes are about whether a stablecoin can act like modern money and whether stablecoin innovation stays in the United States.
The February 10 meeting may not settle every detail, but it could decide the direction. If negotiators agree on a framework for stablecoin interest, the broader bill could start moving again. If they fail, the stablecoin fight may keep blocking the larger effort to set clear federal rules for digital assets at a time when stablecoin use keeps expanding.
