White House talks expose stablecoin rewards as fault line in U.S. crypto legislation

A White House meeting convened on 2 February to break a months-long stalemate over U.S. crypto market structure legislation ended without agreement. Stablecoin rewards was highlighted as the central unresolved issue dividing banks and crypto firms.

The closed-door session, organized by the White House’s crypto council, brought together representatives from both industries to seek compromize on legislation aimed at setting federal rules for digital assets. 

While participants described the talks as constructive, core disagreements persisted, according to people familiar with the meeting.

Rewards versus deposits

At the heart of the impasse is how the bill treats interest and other rewards paid on stablecoins. 

Banking groups have pushed for language that would prohibit such practices. They argue that yield-bearing stablecoins could draw deposits away from insured lenders. 

Also, they argued that it would undermine the funding base that supports lending to households and small businesses.

Crypto firms counter that rewards are a critical tool for customer acquisition and competitiveness. Particularly in a market where stablecoins function as both payment rails and on-chain liquidity instruments. 

Barring rewards, they argue, would entrench incumbents and tilt the playing field against digital-asset platforms.

This dispute has stalled progress on the legislation for months. It also contributed to the Senate Banking Committee postponing a markup amid concerns that the bill lacked sufficient support to advance.

Banking groups hold the line

Following the meeting, major banking trade groups, including the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America, issued a joint statement thanking the administration for the discussion but stopping short of signaling compromise.

The statement emphasized the need for legislation that protects the “safety and soundness” of the financial system and preserves banks’ ability to provide local lending. 

It did not reference stablecoins or rewards directly, underscoring that banks’ core concerns remain unchanged.

Why the issue won’t fade

The clash over rewards reflects a deeper structural tension: who intermediates dollar-denominated value in a digital economy. 

For banks, deposits underpin balance sheets and credit creation. For crypto firms, stablecoins—and the incentives attached to them—are foundational to user growth and on-chain activity.

That makes the dispute less about drafting tweaks and more about economic alignment. Even as lawmakers seek to deliver regulatory clarity, neither side appears ready to concede ground on a question that goes to the heart of their business models.

The White House has not commented publicly on the outcome, though participants expect additional meetings. Meanwhile, the House of Representatives has already passed its version of the bill, leaving the Senate’s path forward uncertain.

Final Thoughts

• Stablecoin rewards have emerged as the decisive fault line in U.S. crypto legislation, reflecting a clash between deposit economics and on-chain competition.
• Without movement on rewards, further talks may continue without unlocking a Senate compromise, delaying market-structure clarity.