The White House on Tuesday gathered again representatives from crypto and banking sectors to negotiate legislation on stablecoin yields. While no final compromise was reached, banks for the first time indicated they would consider "any proposed exemption," marking the first positive sign after months of stalemate. Attention now focuses on the scope of "permitted activities" under the CLARITY Act.
Stablecoin Yields: A Battle Over $6.6 Trillion in Deposits
Whether stablecoins should be allowed to offer yields has become the most sensitive lobbying tug-of-war between Wall Street banks and the crypto industry. This dispute is the main obstacle holding back the Senate Banking Committee from advancing the CLARITY Act. Banks argue that permitting stablecoin yields would pose a "catastrophic competitive threat" to the core deposit business of the U.S. banking system, endangering a market worth $6.6 trillion. Although the White House last week urged both sides to produce a compromise, the issue had been deadlocked for months, with banks previously taking a hard line for a complete ban on yield-bearing stablecoin activities.
Coinbase, Ripple, a16z at the Table
Attendees from the crypto side included executives from Coinbase, Ripple, a16z, the Crypto Innovation Council, and the Blockchain Association. The White House had trimmed the participant list in the previous round, but the February 2 meeting hosted by Trump's crypto advisor Patrick Witt, lasting over two hours, yielded no major breakthrough on yield plans. Yield-related operations are central to crypto platforms' business models; for Coinbase, stablecoin-linked revenue has become a key profit pillar. A legislative ban would directly hit the industry's profitability.
Banks Give Ground: Willing to Consider Exemptions
The latest session brought a notable shift. According to Eleanor Terrett, although no final deal was reached, the dialogue became more substantive. Sources said banks for the first time expressed openness to "any proposed exemption" - a significant concession, as they had previously opposed any form of transaction-based reward exemptions.
'Permitted Activities' Definition at the Core
Negotiations now center on the definition of "permitted activities." Crypto companies want a broad definition to allow stablecoin issuers or third-party platforms to offer yield rewards broadly; banks push for stricter limits, restricting stablecoin functionality purely to payments and settlements. Notably, the GENIUS Act signed into law in July 2025 already prohibits stablecoin issuers from paying interest or yields directly to holders. Thus, the current flashpoint is not direct issuer payments but whether third-party platforms (e.g., exchanges, DeFi protocols) can reward stablecoin holders - a hazier gray area. The White House has asked both sides to present substantive compromise proposals by the end of February to move the bill through the Senate Banking Committee. With Republicans controlling both the White House and Congress, the Trump administration faces one of the most sensitive policy choices this year: protect traditional banking or clear the path for crypto to maintain dollar dominance on-chain.