Crypto vs Banks: Stablecoin Dispute Stalls Major Bill as Firms Seek Compromise

U.S. efforts to advance major cryptocurrency market-structure legislation have stalled amid a deepening dispute between traditional banks and crypto firms over stablecoin “yield” or rewards, with a recent White House meeting failing to broker a compromise as of early February 2026.

The core issue revolves around whether non-bank crypto platforms—such as exchanges—should be permitted to offer interest-like rewards or yields on dollar-pegged stablecoins held by users. Banks, represented by groups like the American Bankers Association, argue that such features create an unfair loophole around the 2025 GENIUS Act (passed in July), which prohibits direct interest payments by stablecoin issuers to preserve bank deposits and financial stability. They warn that yield-bearing stablecoins could trigger massive deposit outflows—potentially trillions—undermining community banks and systemic safety.

Crypto industry advocates, including firms like Coinbase and associations like the Blockchain Association, counter that rewards are essential for user adoption, competition, and innovation. Barring them would disadvantage digital asset providers and push activity offshore.

A February 2, 2026, closed-door White House summit, led by crypto policy advisers, brought together executives from both sides to resolve the impasse holding up bills like the CLARITY Act (House-passed in 2025) and related Senate market-structure proposals. The meeting—intended to revive momentum after the Senate Banking Committee postponed a vote last month—ended without agreement, though participants described discussions as constructive. The White House set an end-of-February target for concessions, with more sessions planned, possibly involving smaller groups.

Some crypto firms have floated proposals, including stronger reserve requirements, enhanced disclosures, closer oversight, and partnerships allowing community banks greater roles in stablecoin issuance or reserve holding. In exchange, the industry seeks assurances that non-banks can continue issuing stablecoins under a federal framework without outright bans on rewards.

Lawmakers view stablecoin rules as foundational to broader crypto regulation, aiming to reduce risks while fostering U.S. competitiveness in fintech. Critics fear excessive restrictions could stifle innovation; supporters see clear standards as boosting trust in digital payments.

With midterm elections looming and divisions persisting across parties and industries, the bill’s path remains uncertain. Ongoing negotiations will likely determine whether a balanced compromise emerges or the legislation lingers in limbo.