Stablecoins: The Yield Wars Hit the White House

A Summit Meeting That Turned Into a Showdown

On Tuesday, February 10, 2026, the White House hosted a negotiation meeting meant to bring together two worlds that couldn’t be more different: traditional banks and the cryptocurrency industry. The issue? Finding a compromise on one of the thorniest questions in the Digital Asset Market Clarity Act: stablecoin yields. According to CoinDesk, crypto negotiators arrived ready to discuss. Their banking counterparts, however, came with a non-negotiable position: ban these yields outright. The crypto industry was represented by its heavyweights: executives from Coinbase, Ripple, a16z, the Crypto Council for Innovation, and the Blockchain Association. Facing them were America’s most powerful banking lobbies, including the Bank Policy Institute and the American Bankers Association.

The Document That Reveals Banks’ Hardline Stance

A principles document circulated by banking negotiators, obtained by CoinDesk, lays out their position without ambiguity. Banks are demanding a ban on “any form of financial or non-financial consideration given to the holder of a payment stablecoin in connection with the purchase, use, holding, possession, or custody of said stablecoin.” In plain terms, this wording aims to block any compensation mechanism: interest payments, yield farming, loyalty programs, or in-kind rewards. The document goes further. It demands that regulators have enforcement tools to uphold this ban and calls for an official study on how stablecoins impact bank deposits.

Why Are Banks So Hostile to Yields?

The yield wars aren’t just a technical dispute. They strike at the heart of the banking business model.

The Threat to Deposits

Traditional banks operate on customer deposits. These funds allow them to make loans to businesses and households—what the industry calls “Main Street lending.” But if stablecoins offer yields higher than traditional savings accounts, depositors could migrate en masse to crypto. This “deposit flight” is bankers’ nightmare. It would reduce their lending capacity and destabilize the entire American credit system.

A Competitive Advantage Seen as Unfair

Crypto platforms like Coinbase or Circle can offer attractive stablecoin yields because they invest underlying reserves (typically in U.S. Treasury bills) and share a portion of the interest with users. Banks, on the other hand, face strict regulatory requirements: capital ratios, FDIC deposit insurance, regular stress tests. They argue that stablecoin issuers escape these constraints while capturing their customer base.

The Clarity Act: A Bill Stuck for Months

The Digital Asset Market Clarity Act was supposed to be the landmark crypto regulation of the Trump 2.0 era. Passed by the House of Representatives last year, it has been mired in the Senate for several months.

The Sticking Points

Beyond yields, several other issues divide Democrats and Republicans: 1. Presidential conflicts of interest — Democrats demand a prohibition on senior government officials holding significant crypto interests. This clause directly targets Donald Trump’s personal investments in the sector. Patrick Witt, White House crypto advisor, told CoinDesk that the administration “will not support legislation that attacks the president on ethics.” 2. Anti-money laundering — Democratic senators want stronger protections against using crypto for illicit purposes. 3. CFTC composition — They’re demanding the agency be fully staffed, including Democratic commissioners, before it can regulate crypto markets.

A Tight Political Calendar

The November 2026 midterms are approaching. The traditionally slow Senate is already struggling to find session time for its priority items. The current deadlock over Department of Homeland Security funding is monopolizing attention. The longer this drags on, the less likely it becomes that major crypto legislation can pass before the elections.

Lukewarm Official Statements

After the meeting, both sides communicated—without conceding anything. Summer Mersinger, CEO of the Blockchain Association, struck an optimistic tone: “We are encouraged by the progress made as stakeholders remain constructively engaged to resolve outstanding issues.” Ji Kim, head of the Crypto Council for Innovation, soberly stated that “important work continues” and thanked “the banking industry for its ongoing engagement.” On the banking side, a joint statement from the Bank Policy Institute and the American Bankers Association reiterated their red line: “This framework can and should embrace financial innovation without compromising safety, and without jeopardizing the bank deposits that fuel local lending and economic activity.”

What’s Next? Possible Scenarios

After two White House meetings without significant progress, the ball could return to legislators.

Scenario 1: A Last-Minute Compromise

Negotiators could find a middle-ground formula: allowing yields under strict conditions (rate caps, audited reserves, specific licensing). This would be a partial victory for both camps.

Scenario 2: A Vote Without Consensus

The Senate Banking Committee could force a majority vote, even without bipartisan agreement. The bill would then be modified through amendments, with unpredictable results.

Scenario 3: Indefinite Postponement

Faced with multiple roadblocks, the Clarity Act could be pushed back until after the midterms. The crypto industry would continue operating in regulatory limbo that benefits offshore players.

What This Means for Investors

For holders of stablecoins like USDT or USDC, this battle has concrete implications. If yields are banned in the United States, American platforms (Coinbase, Kraken, Gemini) won’t be able to offer stablecoin returns. Investors would need to either: – Turn to offshore platforms (with associated risks) – Accept stablecoins without compensation – Migrate to decentralized DeFi solutions, outside the regulatory perimeter Conversely, if a compromise allows regulated yields, American stablecoins could become more attractive and strengthen their dominance over Tether’s USDT, issued from the British Virgin Islands.

Conclusion: A War of Attrition Shaping America’s Crypto Future

The February 10 meeting at the White House didn’t resolve the conflict between banks and crypto over stablecoin yields. It confirmed that this issue has become the Gordian knot of American crypto regulation. Banks are defending their historical model. The crypto industry is defending its competitive advantage. And in the middle, legislators are trying to build a framework that satisfies both camps—an equation that seems unsolvable today. One thing is certain: the outcome of this battle will determine whether the United States remains the center of gravity for financial innovation or lets it migrate to more welcoming jurisdictions.