There is a fundamental divide between banks and the crypto industry when it comes to stablecoin yields. Banks see yield-bearing stablecoins as a threat to traditional deposit business, while the crypto sector views them as a standard feature and a key driver of innovation in digital finance.
According to sources familiar with the matter, the White House has issued a clear directive to all parties involved: reach a compromise on the legislative language for stablecoin yields by the end of this month.
Background and Urgency of the White House Meeting
The deadlock over US stablecoin regulation is intensifying in Washington. On February 2, 2026, the White House held a closed-door meeting chaired by Donald Trump’s crypto advisor, Patrick Vietor.
The two-hour discussion brought together policy experts from both the crypto industry and Wall Street banks, convening in the White House’s Diplomatic Reception Room.
The central focus was the most contentious provision in the Senate’s crypto market structure bill: Should stablecoins be allowed to offer yields and rewards?
While participants described the meeting as "productive," fundamental policy differences between banks and crypto firms remain unresolved. Crypto industry representatives outnumbered bankers, but the banking side has been slow to move toward an agreement, needing buy-in from their association members before taking action in negotiations.
The Strategic Significance of Banks’ Direct Involvement
On February 10, the White House will host another round of staff-level meetings, this time with a notably different participant lineup.
Unlike the early February session, which was dominated by trade association representatives, senior policy personnel from several major banks will participate directly for the first time. These include leading financial institutions such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, PNC, and U.S. Bank.
This shift from trade group representation to direct institutional dialogue signals the White House’s intent to accelerate negotiations by involving decision-makers directly in the discussions.
"Inaction is not an option," said Cody Carbone of the Chamber of Digital Commerce after the meeting. "We’re committed to rolling up our sleeves and working hard to ensure that legislative progress doesn’t punish innovators or consumers who see digital assets as the foundation of their financial future."
The Core of the Stablecoin Yield Debate
The heart of the debate is whether non-bank entities—such as crypto exchanges—should be allowed to offer yields or rewards to stablecoin holders.
The banking industry argues that yield-generating stablecoins are essentially "shadow deposits" and could become substitutes for bank deposits.
They warn that if crypto firms are allowed to offer interest-like returns without bank-level regulation, traditional banks could lose as much as $500 billion in deposits by 2028.
The American Bankers Association has made "curbing the payment stablecoin provision of interest/yield/rewards" its top policy priority for 2026.
By contrast, crypto industry leaders stress that rewards are a standard feature in digital finance and are critical for user adoption.
They argue that banning rewards is anti-competitive, would stifle US innovation, and would effectively grant banks a monopoly over dollar-denominated yield products.
Comparing Bank and Crypto Industry Positions on Stablecoin Yields
| Dimension | Banking Industry View | Crypto Industry View |
|---|---|---|
| Nature of Yield | "Shadow deposits" subject to bank regulation | Standard digital finance feature that incentivizes participation |
| Financial Stability | May erode bank deposit base and impact credit system | Promotes financial innovation and increases market competition |
| Regulatory Path | Only regulated banks should offer interest products | Crypto firms should be allowed to offer yields within a compliance framework |
| Market Impact | Up to $6 trillion in deposits could shift | Restricting yields would harm US innovation and competitiveness |
Economic Realities and Growth Potential of the Stablecoin Market
The scale of the stablecoin market is now impossible to ignore. Stablecoin market capitalization surged by about 50% last year, surpassing $300 billion, while trading volume soared 75% in 2025 to $33 trillion.
In January 2026 alone, monthly trading volume jumped further to $10 trillion.
Demand for yield-bearing stablecoin products is clear. While the average US savings account rate sits at just 0.39%—and checking accounts at an even lower 0.07%—many crypto exchanges offer yields above 3.5% on major stablecoins.
This substantial rate differential explains why banks are worried about deposit outflows. The US Treasury estimates that as much as $6.6 trillion in bank deposits could be at risk.
The Dollar’s Global Standing and the Strategic Value of Stablecoins
There are deeper strategic considerations behind the stablecoin debate—namely, the international status of the US dollar. The Dollar Index (DXY) has fallen 9.5% over the past year, and the share of US debt held by foreigners has dropped from around 50% in the 2010s to just 30% today.
Against this backdrop, stablecoin issuers have become critical supporters of the dollar. For example, Tether is now the world’s 18th-largest holder of US Treasuries, increasing its exposure by $6.5 billion in Q4 2025 alone.
Widespread stablecoin usage also quietly strengthens the dollar’s dominance worldwide. In countries like Turkey, Nigeria, and Argentina, individuals have turned to stablecoins to shield their assets from runaway inflation.
Notably, 99% of stablecoins are pegged to the US dollar, meaning their adoption is, in effect, expanding the dollar’s global reach.
Seeking Consensus: A New Path of Collaboration, Not Confrontation
Despite seemingly opposing positions, there are signs of emerging consensus. The crypto industry has proposed several compromises, including allowing community banks to serve as regulated reserve holders for stablecoin issuers.
Community banks play a key role in this debate. While smaller than major institutions, they wield real influence in Washington.
Because they are more vulnerable to potential deposit outflows, they have a vested interest in leveraging stablecoins more effectively.
On the positive side, community banks are also more agile, able to integrate new solutions into their infrastructure, whereas large institutions are often hamstrung by legacy systems.
Crypto representatives emphasize that the stablecoin yield negotiations are central to resolving the biggest obstacle in the market structure legislative process.
Blockchain Association CEO Summer Mersinger called these meetings "an important step toward a bipartisan, market structure legislative solution for digital assets."
Legislative Outlook and Industry Impact
The next step is to advance the bill through the Senate Banking Committee, building on last week’s progress in the Senate Agriculture Committee, which is led by Republicans.
If both sides reach a compromise, it could help accelerate long-delayed crypto legislation. If no agreement is reached on stablecoin yields, the bill is expected to remain stalled.
Market participants are watching these developments closely. As Gate Research highlighted in its 2025 spot listing key data report, regulatory clarity is widely seen as a potential confidence booster for investors and institutions.
Given the crypto market’s high volatility and abundant supply, any regulatory progress could significantly impact price discovery and liquidity efficiency.
Conclusion
Inside the meeting room, both sides continue to debate fiercely. Bank representatives insist that yield-bearing stablecoins are "shadow deposits" that could trigger up to $6 trillion in deposit flight.
Crypto industry representatives counter that stablecoin yields above 3.5% simply reflect natural market demand, far outpacing the traditional bank savings rate of 0.39%.
Meanwhile, outside the window, the stablecoin market keeps expanding—market cap has topped $300 billion, monthly trading volume has reached $10 trillion, and 99% of stablecoins remain pegged to the US dollar, quietly supporting the dollar’s international standing.
