Crypto Clash: Banks vs Crypto – Stablecoins Under Fire

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In the pale glare of the White House, a second gathering of bankers and crypto men closed without a verdict on the stubborn creature known as stablecoin yield. The dispute, long postponed, remains unresolved, a stubborn knot in the fabric of U.S. digital asset regulation.

The February 10 session, led by Patrick Witt, Executive Director of the President’s Crypto Council, probed whether stablecoin issuers should be allowed to offer yield or rewards to holders, as if the coins themselves could be coaxed into generosity.

They called the talks more detailed than before, a sign, perhaps, that the gears moved, not that justice approached. Yet compromise eluded them. The CLARITY Act, a lamp whose switch was pulled years ago, remains stuck in the Senate Banking Committee.

Stablecoin Yield at the Center of the Dispute

At the heart of the matter lies a question: are stablecoin rewards nothing more than bank interest dressed in digital robes, and should such allowances be permitted?

Banking spokesmen-Goldman Sachs, JPMorgan, Bank of America, Wells Fargo, Citi, PNC, U.S. Bank-sounded the alarm: yield-bearing stablecoins could unleash a tidal wave of deposits from traditional banks, as if rivers were itching to abandon their banks for brighter coins.

They laid out a manifesto, handwritten and solemn, a set of “prohibition principles” that would ban any form of reward offered to stablecoin holders. If such favors were allowed, they warned, lending would sag, and the old deposit model would crumble like a stale coin purse.

Crypto firms-Coinbase, Ripple, a16z, Paxos, the Blockchain Association-pushed back with a sardonic smile. They say stablecoin rewards are the lifeblood of on-chain finance, a necessary fuel for fair competition against the lumbering giants of the old economy.

They also warned that rules too tight could slow invention to a crawl and push activity beyond the U.S. borders where the watchmen are fewer and the coffee is cheaper.

CLARITY Act Remains in Limbo

The question of yield has become the gatekeeper of the CLARITY Act, which aims to define regulatory oversight for digital assets and clarify the roles of the SEC and the CFTC. The bill passed the House in 2025 but has not advanced in the Senate, still held by unresolved concerns about stablecoin regulation.

Although banks maintained a firm stance, a shift in tone did appear. For the first time, banking representatives signaled limited openness to discussing potential exemptions for transaction-based rewards. Yet the quarrel over what counts as “permissible activities” remains unresolved.

The White House has urged both sides to reach an agreement by March 1 to preserve legislative momentum. Further discussions are expected in the coming days, though it is unclear whether another full-scale meeting will be held before the deadline.

Until a compromise is reached, stablecoin regulation and broader reform of the U.S. crypto market structure remain in a holding pattern.

Cover image in ChatGPT, BTCUSD chart on Tradingview

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2026-02-12 06:22