White House-led talks may fail to reach deal on stablecoin ‘interest’… divisions persist between banks and crypto

The White House had sought to reach an agreement by this weekend on whether stablecoins should be allowed to pay interest (yield), but negotiations are reported to be struggling.

On the 27th (local time), Decrypt senior reporter Sander Lutz, citing banking-industry sources, said, “The White House had hoped to settle the key issues related to stablecoin yield before March, but an agreement will not be reached (before March).”

The bill currently under discussion is the “CLARITY Act.”, which addresses the broader market structure for virtual assets (cryptocurrencies), and whether to allow stablecoin interest payments remains a central sticking point. One source said, “Draft language is going back and forth, but we are not close to a deal.”

Banks are concerned that paying yield on stablecoins could trigger deposit outflows and undermine financial-system stability. By contrast, industry figures including Coinbase CEO Brian Armstrong argue that stablecoins should be able to provide yield to users even within a regulated framework.

Still, Eleanor Terrett, host of Crypto in America, cited another banking source in pushing back on some assessments that talks are “on the verge of collapse.” She said that representatives of major banking groups who attended recent White House meetings do not agree with an overly pessimistic interpretation of the situation, and that the March 1 deadline is not an absolute cutoff.