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The White House will host cryptocurrency executives and banking representatives on February 10 to negotiate stablecoin legislation stalled over whether digital dollar issuers can pay interest to users—a feature banks say could siphon deposits from the traditional financial system.
The dispute centers on yield-bearing stablecoins like USDC and USDT, which banking groups want restricted to prevent competition for the deposit base that funds their lending operations. Crypto firms argue interest payments are essential to attracting users and competing with conventional financial products.
Previous White House-led talks this week made limited progress, according to journalist Eleanor Terrett, who cited banking industry sources. A congressional vote on the legislation was postponed amid concerns about bipartisan support, and the February meeting represents another attempt to break the impasse before legislative momentum fades.
At stake is whether the U.S. establishes rules allowing digital dollars to function like money market accounts—offering yields to holders—or restricts them to basic payment rails that protect banks’ deposit franchises. The outcome could reshape competition between crypto platforms and traditional finance..
According to reporting by journalist Eleanor Terrett, the upcoming session will again involve industry stakeholders and policymakers seeking common ground.
“The next iteration of the White House stablecoin yield discussions between crypto and the banks has been scheduled for Tuesday.” Eleanor Terrett, journalist said, citing a banking-industry source.
Participants reportedly described the previous meeting as productive, though several core disputes remain unresolved.
The renewed talks disclose a push within Washington to establish clearer rules governing digital assets as market volatility continues to shape investor sentiment.
Regulatory clarity has long been viewed as a catalyst for institutional participation and price stability across digital asset markets.
At the center of the policy debate is whether stablecoin issuers should be allowed to offer interest or rewards to users holding their tokens.
Banking groups have advocated for language that would restrict such incentives, arguing they could siphon deposits away from traditional financial institutions.
Crypto companies, by contrast, maintain that yield or reward mechanisms are essential to attracting customers and competing with conventional banking products.
Banking organizations remain concerned that competition from yield-bearing stablecoins could weaken their deposit base, a key funding source for lending activities.
The dispute has contributed to delays in moving the legislation through Congress.
A scheduled vote was previously postponed amid concerns that the bill lacked sufficient bipartisan support to advance to the Senate floor.
The outcome of the February negotiations could therefore determine whether lawmakers can reconcile competing priorities, financial stability on one side and innovation incentives on the other.
The White House’s crypto policy team has reportedly emphasized urgency in reaching consensus, reflecting the administration’s broader objective of establishing a comprehensive regulatory framework for digital assets.
Key industry leaders have also proposed amendments to the CLARITY Act aimed at making the legislation more acceptable to policymakers and traditional financial institutions.
However, banking stakeholders have so far shown limited willingness to modify their position on stablecoin yields.
Despite the impasse, some lawmakers remain optimistic that negotiations will produce a compromise.
The February 10 meeting represents another attempt to bridge policy gaps before legislative momentum fades.
Continued delays could push final action further into the congressional calendar, potentially affecting how quickly new rules are implemented.
The regulatory debate comes during a period of broader market weakness, with recent price declines across major digital assets contributing to cautious investor sentiment.
Passage of a comprehensive crypto market framework is widely viewed within the industry as a potential confidence booster, particularly for institutional participants seeking legal certainty.
A finalized bill could clarify how stablecoins operate within the U.S. financial system, define oversight responsibilities among regulators, and establish compliance standards for exchanges and issuers.
Such measures may reduce legal ambiguity, a factor many asset managers cite as a barrier to expanding exposure to crypto markets. However, the substance of any compromise will likely determine its impact.
Restrictions on stablecoin incentives could reshape competitive dynamics between crypto-native platforms and traditional banks, while more permissive rules could accelerate innovation but raise oversight concerns.
As negotiations resume, investors are closely monitoring signals from Washington that may influence liquidity, institutional adoption, and the regulatory trajectory of the U.S. digital asset sector.
