Stablecoins see progress as White House debates yield

• Lyla Velez
• February 19, 2026
• News
• 0 Comments

Key Points:

• Stablecoin yields remain unresolved despite constructive White House CLARITY Act talks with banks.
• Negotiators balancing innovation and stability, aiming to settle yields by early March.
• Regulatory clarity could unlock institutional participation in custody, intermediaries, and payment tokens.

The latest CLARITY Act White House meeting brought banks and crypto policy leaders closer on market structure, but stablecoin yields remain the sticking point. As reported by CoinDesk, participants characterized the session as constructive and made progress with banks, though no deal on yield rules emerged.

Negotiators are trying to reconcile innovation goals with financial stability while keeping legitimate activity onshore. As reported by Coingape, several participants signaled a need to settle the yield question by early March to preserve legislative momentum.

Institutional adoption hinges on clarity around custody, market intermediaries, and payment tokens. According to Benchmark, regulatory certainty from the CLARITY Act could unlock sidelined deployments by banks, asset managers, and hedge funds that have paused plans amid ambiguity.

Banks vs. crypto: positions and floated compromise

Banking groups have emphasized safety and soundness, arguing that interest-like returns on stablecoin balances could drain core deposits and weaken lending. According to the Financial Services Forum, any framework should preserve the capacity of banks to fund loans to households and small businesses while mitigating run and contagion risks.

Crypto advocates have advanced a narrower path to avoid overreach. According to the Digital Chamber, one floated compromise would prohibit rewards on static, idle holdings that resemble deposit interest while allowing activity-linked incentives tied to transactions, liquidity, or network participation.

Administration voices have suggested banks can compete on an even footing if guardrails are well targeted. “They can also offer stablecoin products to their customers, just the same as crypto… This is not an unfair advantage,” said Patrick Witt, a White House crypto adviser, in comments covered by Cointelegraph.

Key definitions shaping the stablecoin yield debate

Clear terms matter because enforcement, disclosures, and prudential expectations flow from definitions. According to the American Bar Association, overbroad bans on rewards risk stifling innovation, so policymakers should distinguish bank deposits from non-deposit, yield-bearing crypto products subject to market risk and different protections.

Static-hold rewards credit value to users simply for keeping a stablecoin balance, making them resemble interest on idle funds. Transactional or activity-linked rewards accrue when users provide liquidity, facilitate payments, or perform verifiable services; these are contingent on participation and should not be conflated with insured bank interest.

DeFi yields typically arise from protocol mechanics such as fees, liquidity provision, or lending pools and can vary with utilization and market conditions. Bank interest, by contrast, is paid on deposits within a regulated balance-sheet model, comes with prudential oversight, and benefits from established consumer protections that do not apply to most crypto rewards.

At the time of this writing, Coinbase shares closed at $165.94, up 1.15% on the day, based on data from Yahoo Finance. This market backdrop offers context but does not alter the legislative calculus now centering on how narrowly to tailor stablecoin-yield restrictions.