TLDR

  • Stablecoin yield disagreement halts White House discussions ahead of March deadline
  • Rift between banks and crypto firms impedes stablecoin regulation progress
  • Yield conflict derails U.S. stablecoin legislation talks
  • White House stablecoin meetings stall over reward ban proposals
  • Stablecoin regulation faces a roadblock as banks push for yield restrictions

The most recent White House gathering on stablecoin regulations concluded without a consensus, as banks and crypto companies stuck to their conflicting stances. The discussions once more brought to light significant worries regarding stablecoin yields and their effect on traditional funding frameworks. The session wrapped up with both parties gearing up for additional negotiations prior to the March 1 deadline.

Stablecoin Yield Dispute Blocks Progress

The meeting delved into technical topics, but the divide over stablecoin yields stayed substantial. Banks called for strict restrictions on any rewards linked to stablecoin transactions and pushed for stricter enforcement measures. Crypto leaders pushed back against these demands, arguing that a wide-ranging ban would undermine the digital dollar market.

Banks submitted written “prohibition principles” aimed at passive and activity-based incentives, and they advocated for including these rules in the. Crypto groups countered that stablecoin adoption hinges on adaptable reward structures, and they emphasized the importance of innovation. The debate highlighted how regulations now determine which stablecoin initiatives can operate.

The GENIUS Act sparked the ongoing regulatory effort, as it aims to oversee stablecoin issuance while safeguarding bank deposits. Banks asserted that interest-bearing stablecoin offerings pose a risk to liquidity systems and warned of potential deposit outflows. Crypto firms rejected this stance, arguing that market expansion relies on competitive on-chain alternatives.

Banks Push Prohibition Principles While Crypto Firms Resist

Major U.S. banks called for a complete ban on benefits associated with holding or using products. They stated that even activity-based rewards could divert funds from traditional channels and pushed for narrow exceptions. Crypto representatives opposed these restrictions and advocated for broader definitions of allowed stablecoin activities.

The meeting included executives from top banks, who stressed the need for strict safeguards. Crypto groups put forward alternative plans and sought a framework that still supports moderate stablecoin incentives. The exchange revealed the significant distance between both parties on a common framework.

Participants observed that banks provided limited wording allowing discussion of specific exceptions. Crypto groups said this change indicated progress and supported ongoing talks. Even so, both sides acknowledged that significant disagreements regarding stablecoin rewards remain.

Deadline Pressure Rises as Senate Considers Market Structure Bill

The White House aims to finalize stablecoin guidance by March 1, and staff from the Senate Banking Committee were present. Lawmakers desire a unified stance and seek clarity on overseeing stablecoin issuers and platforms. However, the yield disagreement has slowed progress on the broader market structure bill.

The House has passed the CLARITY Act, and the Senate must now secure bipartisan agreement on stablecoin regulations. Negotiators are concerned about additional delays because Coinbase withdrew its support due to yield prohibitions, which weakened legislative momentum. Talks will continue, and the may schedule additional sessions.

The meeting demonstrated that both parties remain involved and anticipate further negotiations soon. The administration seeks a resolution and hopes to avoid stalled legislation. Yet the central conflict over stablecoin yields still shapes the way forward.