February 11 News, the second round of discussions at the White House regarding stablecoin regulation failed to reach an agreement between banks and crypto companies, with core disagreements centered on whether stablecoins can offer yields or rewards to users. Several crypto organizations engaged in discussions alongside major U.S. banks, but stalemated on key terms, causing another setback for the U.S. stablecoin regulatory framework.
The meeting was directly related to the proposed CLARITY Act. This legislation is based on the digital asset regulatory framework introduced by the GENIUS Act and has been passed by the House of Representatives, but the Senate has yet to advance it. The yield provisions are seen as the biggest obstacle. Banks are concerned that if stablecoins offer interest or rewards, it will divert traditional deposits, weaken banks’ ability to lend to households and small businesses, and impact financial system stability.
In contrast, crypto companies argue that reward mechanisms are essential tools for driving on-chain USD and decentralized finance applications. Without incentives, stablecoins can only remain as “payment tools,” making it difficult to build a richer financial ecosystem. They advocate for allowing limited reward models based on transactions or holdings under compliant conditions.
It has been disclosed that banks submitted a “prohibition principle” document at the meeting, advocating for a complete ban on any financial or non-financial rewards linked to stablecoins, accompanied by strict anti-avoidance clauses. Crypto executives, on the other hand, called for a more flexible regulatory approach. Although White House officials urged both sides to find a compromise by March 1, no substantial breakthrough has been achieved in this round of negotiations.
If the dispute continues, the CLARITY Act may remain shelved, and stablecoins could be limited to their most basic functions. Some industry insiders warn that excessive restrictions might push innovation toward more lenient overseas markets. The banking camp emphasizes that prioritizing the protection of the traditional credit system remains the primary goal.
Currently, both sides expect to continue negotiations. The final direction of stablecoin yield rules could profoundly influence U.S. digital asset policy and the development of the global on-chain USD ecosystem.
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