White House Stablecoin Talks End Without Deal as Banks Push Strict Limits on Crypto Yield

Senior executives from the cryptocurrency and banking sectors met at the White House this week for another round of talks on stablecoin regulation, but discussions ended without a breakthrough on one of the most contentious issues: whether stablecoin holders should be allowed to earn rewards or yield.

The closed-door session was the second in a series aimed at resolving disagreements that have slowed progress on broader U.S. crypto market structure legislation. While participants described the meeting as “productive,” both sides acknowledged that major differences remain.

A Deep Divide Over Stablecoin Yield

At the center of the debate is whether companies should be permitted to offer interest or other financial incentives to users who hold payment stablecoins. Banks argue that allowing yields on stablecoins could pull deposits away from traditional financial institutions, potentially creating liquidity pressures. Crypto firms counter that banning such rewards would curb innovation and limit the utility of digital assets.

According to multiple attendees, banking representatives took a firm stance during the meeting. A document circulated to reporters outlined what banks described as “prohibition principles,” calling for a broad ban on any financial or non-financial benefits tied to holding, owning, or using payment stablecoins.

The proposal reportedly includes strict enforcement measures, anti-evasion rules, and tight restrictions on marketing practices that might make stablecoin rewards appear similar to insured bank deposits.

This approach goes further than the latest draft of the crypto market structure bill under consideration in Congress. That draft would prohibit interest for passive stablecoin holdings but allow more limited, activity-based rewards or incentives under defined conditions.

Bank representatives emphasized that any exceptions to a yield ban should be “extremely limited in scope.”

Strong Pushback From the Crypto Industry

Crypto stakeholders pushed back sharply on several of the banks’ proposed principles. One source familiar with the discussions said industry representatives “really dug in,” particularly objecting to what they viewed as sweeping enforcement and anti-evasion provisions.

The meeting brought together leading voices from both industries. On the crypto side, participants included Ripple, Coinbase, the Crypto Council for Innovation, and the Blockchain Association. Major banks such as Goldman Sachs, Citi, and JPMorgan Chase were present, along with trade groups including the American Bankers Association.

Blockchain Association Executive Vice President Dan Spuller noted that banks “did not come to negotiate from the bill text,” instead presenting broader prohibitive principles, which he described as a central point of disagreement. He characterized the gathering as a smaller, more focused session but acknowledged the impasse.

Some observers believe the next move may rest with lawmakers. One source suggested that responsibility now shifts back to the Senate Banking Committee, which is overseeing the legislative effort.

Signs of Optimism Despite the Stalemate

Even with tensions evident, several crypto executives struck an optimistic tone about the broader legislative process. The proposed market structure act aims to clarify regulatory boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission, a long-standing issue in U.S. crypto policy.

Ripple Chief Legal Officer Stuart Alderoty described the session as productive, saying “compromise is in the air” and pointing to bipartisan momentum behind clearer crypto rules.

Coinbase Chief Legal Officer Paul Grewal echoed that view, noting that while progress had been made, “there’s still more work to do.”

What Comes Next

The outcome of the stablecoin yield debate could shape how digital dollars function in the U.S. financial system. For banks, the concern centers on preserving deposit stability and regulatory safeguards. For crypto firms, the focus is on maintaining flexibility to innovate and compete.

For now, no final agreement has emerged. But with both sides continuing to engage and lawmakers weighing their options, the discussion around stablecoin rewards remains a pivotal piece of the broader effort to define the future of digital asset regulation in the United States.