Headline: White House Talks Stall Over Stablecoin Yield — CLARITY Act Momentum at Risk In a high-stakes second White House meeting on Feb. 10, major U.S. banks and leading crypto firms failed to bridge a deep divide over whether stablecoin issuers should be permitted to offer yield or rewards to holders — leaving one of the thorniest issues in U.S. digital asset policy unresolved. Led by Patrick Witt, Executive Director of the President’s Crypto Council, the session dug deeper than prior discussions but produced no compromise. That deadlock keeps the Digital Asset Market Clarity Act of 2025 (the CLARITY Act), which passed the House last year, stalled in the Senate Banking Committee. At issue is whether stablecoin rewards look and act like bank interest—and if they should face comparable limits. Big banks including Goldman Sachs, JPMorgan, Bank of America, Wells Fargo, Citi, PNC and U.S. Bank pushed a strict position, presenting written “prohibition principles” calling for a ban on “any form of financial or non-financial consideration” to stablecoin holders. Their argument: yield-bearing stablecoins could trigger large deposit outflows, threaten banks’ lending capacity and destabilize the traditional deposit model. Crypto-industry attendees — among them Coinbase, Ripple, a16z, Paxos and the Blockchain Association — vigorously countered. They said yield and rewards are central to on-chain finance and necessary for crypto products to compete fairly with conventional financial offerings. Industry representatives warned that overly restrictive rules could stifle innovation or push activity offshore. Participants said the tone of the talks has shifted slightly: for the first time, some bank representatives signaled limited openness to carve out exemptions for transaction-based rewards. But agreement on what constitutes “permissible activities” is far from settled. The White House has urged both sides to reach a deal by March 1 to keep legislative momentum alive. Additional discussions are expected in the coming days, but it’s unclear whether another full-scale convening will occur before that deadline. Until a compromise is found, stablecoin regulation — and broader efforts to clarify the U.S. crypto regulatory framework — remain in limbo, prolonging uncertainty for banks, crypto firms and lawmakers alike. Read more AI-generated news on: undefined/news