Banking lobbyists pushed for a total ban on stablecoin yield at a high-level White House meeting, leaving the landmark crypto bill in limbo with an end-of-February deadline.
A high-stakes White House meeting on the Digital Asset Market Clarity Act ended without a breakthrough on Tuesday, as banking representatives arrived with a hardline demand: a total ban on stablecoin yield payments to users.
President Trump convened top banking executives and crypto industry leaders at the White House on February 10 to resolve the last major sticking point blocking the CLARITY Act, a sweeping crypto market structure bill that would define regulatory boundaries between the CFTC and SEC for digital asset oversight.
According to CoinDesk, banking representatives arrived with a "principles" document calling for a complete prohibition on stablecoin issuers paying yield to holders. The crypto industry countered that yield-bearing stablecoins are a core innovation and removing them would gut the bill's competitive intent. Neither side moved from their position.
The Trump administration has set an end-of-February deadline for both parties to reach compromise language, with the goal of moving the bill through the Senate Banking Committee shortly after.
The stablecoin yield question strikes at the heart of the traditional finance versus DeFi divide. Banks view yield-bearing stablecoins as unregulated deposit products that could siphon customers away from savings accounts. The crypto industry sees them as a fundamental feature of programmable money.
If the CLARITY Act passes with a yield ban, it could limit innovation in the stablecoin sector, which now exceeds $300 billion in total market cap. If the bill fails entirely, the regulatory vacuum that has hampered institutional adoption for years would persist.
The meeting comes during a turbulent period for crypto markets. Bitcoin is trading near $70,000 after a volatile week that saw prices briefly dip below $61,000, and institutional ETF flows have turned sharply negative.
The end-of-February deadline is now the key catalyst. If a compromise emerges, the bill could potentially reach the President's desk later this year. Watch for signals from the Senate Banking Committee and any follow-up meetings between the two camps. DHS funding expires on February 14, raising the risk of a partial government shutdown that could further complicate the legislative timeline.
This is a developing story. The CLARITY Act is widely regarded as the most significant crypto market structure bill to reach this stage in Congress, but the stablecoin yield impasse shows how deep the divide between traditional finance and the crypto industry remains.
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