#WhiteHouseTalksStablecoinYields

The White House is actively facilitating high-level discussions on rules and guidance for earning interest/yields on stablecoins — a hot-button issue that's stalling broader U.S. crypto legislation like the CLARITY Act in 2026.
Under the GENIUS Act (signed by President Trump in 2025), stablecoin issuers (e.g., Circle for USDC) are strictly prohibited from paying direct interest or yield to holders — keeping payment stablecoins focused on stability, payments, and settlement rather than acting like interest-bearing deposits.

However, third-party platforms (e.g., exchanges like Coinbase) can currently offer "rewards" or yield (often ~3-5% APY) to users holding stablecoins on their platforms — typically funded by revenue-sharing from issuers' reserve earnings (e.g., from U.S. Treasuries).
Core Debate & White House Role
The White House has hosted multiple closed-door meetings (Feb 2 & Feb 10, 2026, with potential follow-ups) between banking groups, crypto firms, and regulators to broker a compromise — aiming for resolution by end-February or March 2026 to unblock market structure legislation.

Banks' Position (e.g., ICBA, major lenders):
Demand a broad ban or tight restrictions on any yield/rewards — including third-party platforms — to prevent deposit flight (estimates: $500B–$6T in potential outflows from banks).
Argue it threatens safety/soundness, lending (especially community banks), and could create uninsured "deposit-like" products risking runs or systemic issues.
Pushed "Prohibition Principles" for strict enforcement, anti-evasion rules, and limits on marketing that implies yields resemble insured interest.
Crypto Industry's Position (e.g., Coinbase, Digital Chamber):
View rewards as essential for user adoption, liquidity, and competition — not true "interest" but incentives or pass-throughs from reserve income.
Push to retain exemptions for activity-based rewards (e.g., tied to usage/staking) while banning passive holding yields.
Warn broad bans would hurt innovation, drive activity offshore, and undermine U.S. competitiveness in digital finance.
Key Implications
Safety & Investor Protection — Yield could blur lines between stablecoins (payment tools) and deposits (FDIC-insured), raising run risks if reserves falter.
Market Impact — Allowing yields boosts stablecoin adoption and on-chain yields; restricting them protects traditional banking but may slow crypto growth.
Legislative Stakes — This impasse delays the CLARITY Act (for broader token taxonomy, exemptions, and market structure) — critical for institutional inflows and U.S. crypto leadership.
Global Context — Many jurisdictions (EU MiCA, others) restrict yields to keep stablecoins payment-focused; U.S. outcome could set a precedent.

Bottom Line
The White House is pushing hard for a balanced resolution — clearer rules on stablecoin yields aren't about killing innovation but ensuring safety, fairness, and dollar dominance in a digital world. No final deal yet, but momentum is building toward compromise.