The White House convened a second closed door meeting on February 10 as policymakers intensified efforts to resolve a growing standoff between traditional banks and the cryptocurrency industry over stablecoin regulation. The talks follow an earlier session held in early February that failed to produce consensus, leaving key legislation stalled and uncertainty hanging over the future of dollar linked digital tokens in the United States.
Senior representatives from major banks and leading crypto companies were invited to the discussions, reflecting how central stablecoins have become to broader financial policy debates. Banking participants included Bank of America, JPMorgan, and Wells Fargo, while the digital asset sector was represented by firms such as Coinbase, Circle and Ripple. At the heart of the debate is whether stablecoin holders should be able to earn yield, a feature that banks argue could pull large volumes of deposits away from the traditional system.
For banks, the concern is not theoretical. Industry estimates suggest that trillions of dollars in deposits could gradually migrate toward blockchain based payment rails if yield bearing stablecoins become widespread. Financial institutions warn that such a shift could undermine their funding base and disrupt credit creation. Crypto companies counter that yield mechanisms are essential for competition and innovation, noting that digital platforms already generate significant revenue through transaction fees and network activity.
The policy deadlock has taken on added urgency because it is directly tied to progress on the CLARITY Act, a broader market structure bill that aims to define how digital assets are regulated. Although the bill passed the House of Representatives last year, it remains blocked in the Senate. Lawmakers have indicated that movement will depend on whether regulators and industry can agree on guardrails for stablecoin issuance and distribution.
The White House discussions are also unfolding against a backdrop of shifting leadership and monetary policy signals. Kevin Warsh, the incoming chair of the Federal Reserve, has publicly called for a renewed working arrangement between the Fed and the Treasury. He has argued that clearer coordination is needed on debt management, interest rates and market liquidity, while also emphasizing a smaller central bank balance sheet focused on short term Treasury holdings.
On the same day as the stablecoin meeting, the Fed moved ahead with a liquidity injection into financial markets as part of a wider program aimed at smoothing funding conditions. Analysts note that these operations, while routine, add another layer to the stablecoin debate by highlighting how closely digital asset markets are now linked to traditional liquidity flows.
Supporters of clearer stablecoin rules argue that regulatory uncertainty risks pushing innovation offshore at a time when other jurisdictions are moving faster. Critics maintain that speed should not come at the expense of financial stability or consumer protection. With the White House pressing participants to reach common ground by the end of the month, the outcome of these talks could shape not only the fate of the CLARITY Act but also the role stablecoins play in the future US payments system.
