The White House convened a significant meeting on February 19, 2026, marking its third session in just over two weeks with representatives from the cryptocurrency sector and banking lobbyists. The focus of this gathering was to address the contentious issue of stablecoin rewards, which has been a major obstacle to passing a comprehensive crypto market structure bill.
Patrick Witt, the White House”s crypto adviser, proposed a compromise aimed at allowing rewards for stablecoin transactions, while excluding idle balances. This proposal is part of the broader discussions surrounding the Digital Asset Market Clarity Act, which the Senate is currently considering. A similar measure, known as the CLARITY Act, was approved by the House in July 2024.
Despite the constructive dialogue, no final consensus was achieved during the meeting. Representatives from both Coinbase and Ripple expressed optimism about the discussions, indicating that progress was made, yet key issues remain unresolved. The banking sector has voiced concerns that permitting stablecoin rewards could directly compete with their deposit services, potentially leading to significant outflows from the traditional banking system.
The U.S. Treasury had previously estimated that widespread adoption of stablecoins could result in up to $6.6 trillion in deposit outflows, heightening the banks” apprehensions. However, participants in the recent meeting clarified that their primary concern revolves around competitive pressure rather than an immediate threat of deposit flight.
Witt”s proposal allows third-party platforms, such as cryptocurrency exchanges, to provide rewards based solely on transaction activities. This would limit the ability of users to earn yields on their stablecoin holdings, which remains a pivotal aspect for many within the crypto industry.
As discussions move forward, banking representatives are set to meet again to evaluate the White House”s proposed trade-off. Meanwhile, several additional contentious issues persist, including Democratic demands for enhanced protections in decentralized finance (DeFi) and regulations regarding the involvement of government officials in the crypto space. The success of the bill hinges on garnering sufficient bipartisan support, particularly from Democratic lawmakers.
The outcome of these negotiations will significantly impact the future framework of cryptocurrency regulations in the United States, shaping how stablecoins and digital assets are integrated into the financial system.
