White House Meeting's New Focus: Why Are Stablecoin Yields Attracting Traditional Bank Representatives for the First Time?

Banks and the cryptocurrency industry have fundamental disagreements over the issue of stablecoin yields. Banks believe that yield-bearing stablecoins threaten traditional deposit services, while the crypto industry views them as a standard feature and driver of innovation in digital finance.

Sources familiar with the matter reveal that the White House has issued clear directives to all parties involved: to reach a legislative compromise on stablecoin yield language by the end of this month.

Background and Urgency of the White House Meeting

The deadlock over stablecoin regulation in the U.S. is heating up in Washington. On February 2, 2026, the White House held a closed-door meeting led by Patrick Witte, a crypto advisor to President Donald Trump.

This over-two-hour discussion brought together policy experts from the crypto industry and Wall Street banks, held in the White House diplomatic reception room.

The core issue centered around the most contentious clause in the Senate’s Crypto Market Structure Act: Should stablecoins be linked to yields and rewards?

While participants considered the meeting “productive,” fundamental policy disagreements between banks and crypto companies remain unresolved. Crypto industry representatives outnumbered bankers, but the banking side has been slow to act, needing to secure support from their associations before moving forward in negotiations.

Strategic Significance of Direct Bank Involvement for the First Time

On February 10, the White House will hold another staff-level meeting, with a significantly different participant structure this time.

Unlike the early February meeting mainly attended by industry association representatives, senior policy personnel from several major banks will participate directly for the first time. This includes JPMorgan, Bank of America, Wells Fargo, Citigroup, PNC, and U.S. Bancorp.

This shift from trade groups to direct institutional dialogue indicates that the White House aims to accelerate negotiations by involving decision-makers directly.

“Not acting is not an option,” said Cody Carben of the Digital Chamber after the meeting. “We are committed to rolling up our sleeves, working hard, and ensuring that legislation doesn’t penalize innovators or consumers who see digital assets as the foundation of their financial future.”

Core Focus of the Stablecoin Yield Dispute

The controversy centers on 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” that could become a substitute for bank deposits.

They worry that allowing crypto firms to offer interest-like returns without banking-level regulation could lead to a loss of up to $5 trillion in traditional bank deposits by 2028.

The American Bankers Association has listed “curbing the offering of interest/yields/rewards on payment stablecoins” as a top policy priority for 2026.

In stark contrast, crypto industry leaders emphasize that rewards are a standard feature of digital finance and are crucial for user adoption.

They argue that banning rewards would be anti-competitive, hinder American innovation, and effectively grant banks a monopoly on dollar-denominated yield products.

Comparison of Bank and Crypto Industry Positions on Stablecoin Yields

Economic Reality and Growth Potential of the Stablecoin Market

The stablecoin market size is already significant. Stablecoin market cap surged about 50% last year, exceeding $300 billion, with trading volume soaring 75% in 2025 to $33 trillion.

In January 2026 alone, monthly trading volume further jumped to $10 trillion.

Demand for yield-bearing stablecoin products is evident. While the average savings account interest rate in the U.S. is only 0.39%, and checking accounts as low as 0.07%, many crypto exchanges offer yields exceeding 3.5% on major stablecoins.

This significant interest rate spread explains why banks are worried about deposit outflows. The U.S. Treasury estimates that up to $6.6 trillion in bank deposits could be at risk.

The Strategic Value of Stablecoins for the U.S. Dollar’s International Status

Behind the stablecoin debate lies a deeper strategic consideration—the U.S. dollar’s international position. The dollar index (DXY) has fallen 9.5% over the past year, while foreign holdings of U.S. debt have decreased from about 50% in the 2010s to 30% today.

In this context, stablecoin issuers provide critical support for the dollar. For example, Tether is now the 18th largest holder of U.S. Treasuries globally, increasing its U.S. debt exposure by $6.5 billion in Q4 2025 alone.

The widespread use of stablecoins also implicitly strengthens the dollar’s global dominance. In countries like Turkey, Nigeria, or Argentina, individuals are turning to stablecoins to protect their assets from hyperinflation.

Notably, 99% of stablecoins are pegged to the dollar, meaning their popularity effectively expands the dollar’s international reach.

Seeking Consensus: A New Path of Cooperation Instead of Confrontation

Although the positions of both sides seem opposed, signs of seeking consensus are emerging. The crypto industry has proposed some compromises, including allowing community banks to act as regulated reserve holders for stablecoin issuers.

Community banks play an important role in this debate. Though smaller than large institutions, they have real influence in Washington.

Because they are more vulnerable to deposit outflows, they have a vested interest in leveraging stablecoins.

On the positive side, community banks are also more flexible and can incorporate existing solutions into their infrastructure, whereas large institutions are constrained by legacy systems.

Crypto industry representatives emphasize that negotiating stablecoin yields is key to resolving the biggest obstacle in the market structure legislation process.

CEO of the Blockchain Association, Sommer Messinger, called these meetings “an important step toward seeking bipartisan support for a digital asset market structure legislative solution.”

Legislative Outlook and Industry Impact

The next step is to push the bill through the Senate Banking Committee, aligned with the efforts already passed by the Senate Agriculture Committee last week, led by Republicans.

If both sides reach a compromise, it could help accelerate long-delayed crypto legislation. If no agreement is reached on stablecoin yield treatment, the bill is expected to remain stalled.

Market participants are closely watching the outcome of these discussions. As noted in Gate Research Institute’s key data report on spot tokens in 2025, regulatory clarity is widely seen as a potential confidence booster for investors and institutions.

In a high-volatility, high-supply environment for crypto, any regulatory progress could significantly impact asset price discovery and liquidity absorption efficiency.

Summary

Inside the conference room, representatives from both sides are still fiercely debating. Bank representatives insist that yield-bearing stablecoins are “shadow deposits” that could trigger up to $6 trillion in deposit shifts.

Crypto industry representatives counter that yields exceeding 3.5% on stablecoins are simply a natural reflection of market demand, far above the 0.39% savings account rate in traditional banks.

Outside the window, the stablecoin market continues to expand, with a market cap exceeding $300 billion and monthly trading volume reaching $10 trillion. Meanwhile, 99% of stablecoins remain pegged to the dollar, quietly supporting the dollar’s international dominance.