Banks fear yield-bearing stablecoins will drain deposits. February’s decision will decide: clear rules under the CLARITY Act or fragmented regulation by enforcement. Who should win here — banks or crypto? 💬

The White House has established a February deadline for banks and cryptocurrency firms to address a dispute regarding the ability of stablecoin platforms to offer interest-like rewards to users. According to NS3.AI, this conflict revolves around regulatory definitions that differentiate stablecoins from traditional bank deposit accounts. Banks are concerned that stablecoins could result in significant deposit outflows. The resolution of this issue will influence whether the CLARITY Act advances as comprehensive legislation or if stablecoin regulations become fragmented and driven by agency enforcement.