The White House is preparing to host a second round of closed-door talks between senior banking executives and crypto industry leaders on February 10, as negotiations over the CLARITY Act remain stuck. With tensions still unresolved after an initial meeting earlier this month, the administration is now applying direct pressure on both sides to reach a compromise before the legislation loses momentum in the Senate.
The renewed talks underscore just how contentious stablecoin policy has become in Washington. At the center of the debate is a single but explosive question: should stablecoin issuers be allowed to pay interest to holders? That issue alone has been enough to freeze progress on what is otherwise seen as a broadly supported digital asset market structure bill.
Why Stablecoins Are Blocking the Bill
The CLARITY Act (H.R. 3633) was passed by the U.S. House of Representatives in July 2025 with bipartisan backing and aims to establish clear regulatory rules for digital assets while preserving room for innovation. Since then, however, the bill has struggled to move forward in the Senate.
The core obstacle is the treatment of yield-bearing stablecoins, a growing class of dollar-pegged digital assets that distribute interest to users. Traditional banks argue that allowing these products to offer yield would create a form of unregulated parallel banking, pulling deposits away from the legacy system and threatening financial stability.
Executives from major institutions, including JPMorgan, are expected to attend Tuesday’s meeting. Banking leaders view interest-paying stablecoins as an existential risk, warning that unchecked growth could accelerate capital flight from insured deposits into crypto-native alternatives.
Crypto Firms Push Back on Banking Concerns
On the other side of the table, crypto companies argue that banning interest payments would choke innovation just as global competition in decentralized finance is intensifying. From their perspective, yield-bearing stablecoins are simply a technological evolution of money, offering consumers more choice and efficiency than traditional savings products.
Industry leaders insist that prohibiting yield would effectively lock crypto out of competing on equal footing, reinforcing banks’ dominance over the U.S. financial system. They also warn that overly restrictive rules could push innovation offshore, weakening America’s position in digital finance.
This clash has turned stablecoin regulation into a proxy battle over the future structure of U.S. finance, with neither side willing to concede easily.
White House Takes on the Mediator Role
With Senate negotiations gridlocked, the White House has stepped in as a mediator. The first closed-door meeting, held on February 2, was described by participants as exploratory, bringing together trade groups and industry representatives to map out areas of disagreement.
Tuesday’s session is expected to be far more high-level, with top banking and crypto executives directly involved. The talks are being coordinated alongside the White House Cryptocurrency Committee, signaling that the administration sees the issue as politically and economically urgent.
Officials are reportedly pushing both camps to outline a workable framework that allows yield-bearing stablecoins under clear safeguards, without destabilizing the banking system or undermining consumer protections.
Why the Clock Is Ticking
The White House has made it clear that it wants progress by the end of the month. Without movement, lawmakers fear the CLARITY Act could lose traction amid a crowded legislative calendar and growing political distractions.
Any breakthrough is likely to involve guardrails rather than outright bans, potentially limiting who can offer yield, how reserves are managed, or how stablecoins interact with traditional banks. Still, the outcome remains uncertain, and both industries are entering the talks with deeply entrenched positions.
What is clear is that the February 10 meeting could prove decisive. A narrow compromise could unlock the Senate process and revive the CLARITY Act. Failure, however, would leave U.S. crypto regulation stalled at a critical moment.
