February 11 News, the second round of discussions at the White House regarding stablecoin regulation failed to reach an agreement between banks and crypto companies, with core disagreements centered on whether stablecoins can offer yields or rewards to users. Several crypto organizations engaged in discussions alongside major U.S. banks, but stalemated on key terms, causing another setback for the U.S. stablecoin regulatory framework.
The meeting was directly related to the proposed CLARITY Act. This legislation is based on the digital asset regulatory framework introduced by the GENIUS Act and has been passed by the House of Representatives, but the Senate has yet to advance it. The yield provisions are seen as the biggest obstacle. Banks are concerned that if stablecoins offer interest or rewards, it will divert traditional deposits, weaken banks’ ability to lend to households and small businesses, and impact financial system stability.
In contrast, crypto companies argue that reward mechanisms are essential tools for driving on-chain USD and decentralized finance applications. Without incentives, stablecoins can only remain as “payment tools,” making it difficult to build a richer financial ecosystem. They advocate for allowing limited reward models based on transactions or holdings under compliant conditions.
It has been disclosed that banks submitted a “prohibition principle” document at the meeting, advocating for a complete ban on any financial or non-financial rewards linked to stablecoins, accompanied by strict anti-avoidance clauses. Crypto executives, on the other hand, called for a more flexible regulatory approach. Although White House officials urged both sides to find a compromise by March 1, no substantial breakthrough has been achieved in this round of negotiations.
If the dispute continues, the CLARITY Act may remain shelved, and stablecoins could be limited to their most basic functions. Some industry insiders warn that excessive restrictions might push innovation toward more lenient overseas markets. The banking camp emphasizes that prioritizing the protection of the traditional credit system remains the primary goal.
Currently, both sides expect to continue negotiations. The final direction of stablecoin yield rules could profoundly influence U.S. digital asset policy and the development of the global on-chain USD ecosystem.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Kevin Warsh 成首位「Tech Bro」Fed 主席提名人：AI 樂觀派、持 SpaceX 與 Polymarket 股份
Kevin Warsh, nominated by Trump, becomes the first “Tech Bro” Fed chair, closely connected with Silicon Valley giants, and argues that AI can reduce inflation and supports an accommodative monetary policy. His Silicon Valley background could influence the Fed’s interest-rate decisions; expectations for the crypto market are positive, but the risk of conflicts of interest also needs to be considered. His appointment process and future policy direction will affect the U.S. Dollar Index and valuations of Taiwan stocks.
ChainNewsAbmedia2h ago
BIS calls for globally coordinated stablecoin regulation: warns that Tether and Circle account for 85% of those showing “security-like characteristics”
The Bank for International Settlements (BIS) once again emphasized the importance of global stablecoin regulatory coordination, pointing out three major risks that stablecoins face at this stage, including regulatory challenges related to cross-border flows and issues with market concentration. BIS proposed a unified ledger framework and argued that central banks need to lead the development of digital currencies, which would pose challenges to existing stablecoin issuers such as Tether and Circle. Overall, in the future, stablecoins may face a more stringent regulatory framework.
ChainNewsAbmedia7h ago
ETH drops 0.56% in 15 minutes: Institutions’ ETF in-and-out flows and tightened on-chain liquidity dominate the market
From 17:45 to 18:00 (UTC) on 2026-04-19, the ETH price recorded a return of -0.56% within 15 minutes, closing in the 2294.03 - 2311.0 USDT range, with an amplitude of 0.73%. Heightened market volatility triggered increased short-term trading activity and boosted attention, while overall liquidity performance tightened.
The main driving force behind this unusual move is institutions’ short-term in-and-out flows of ETF funds and a lull in on-chain stablecoin activity. In early April, after the ETH spot ETF recorded a net inflow of $120.24 million over a short period, it quickly reversed to a net outflow of $64.61 million, indicating that institutional capital became more short-term and there was no signal of sustained accumulation. Meanwhile, on-chain USDT and USDC activity fell in tandem to an annual low; ETH’s short-term buying power was clearly insufficient, putting pressure on liquidity.
In addition, high-win-rate whales have been frequently shorting ETH and BTC since April 14, with related position sizes exceeding $25 million, further intensifying downward pressure in the short term. On the macro front, the Federal Reserve maintains high interest rates, the U.S. dollar remains strong, risk appetite has shifted to cautious, and some funds have flowed into traditional assets such as U.S. stocks. On-chain data shows that exchange reserves for ETH have fallen to the lowest level in nearly a decade, suggesting that long-term holders are actively shifting away from self-custody, further reducing market liquidity supply and amplifying price anomalies. Network conditions are stable; gas fees are operating at low levels, and on-chain transactions have not shown extreme spikes.
The risk of near-term fluctuations remains high. ETF fund flows, large on-chain transfers, stablecoin activity, and changes in whale positions will be key indicators to watch. If institutions step up selling or stablecoin outflows expand further, ETH price volatility may intensify. Please continue to monitor macro developments and on-chain liquidity changes, stay alert to the risk of sharp short-term volatility, and get more real-time updates.
GateNews23h ago
UBS Expects Fed to Cut Rates 50 Basis Points by Year-End; 10-Year Treasury Yield Forecast at 3.75%
UBS analysts predict the Federal Reserve will cut interest rates by 50 basis points by 2026, despite rising energy prices. Fed Chairman Powell suggests limited tightening is needed, focusing on core inflation evidence before cuts. The forecast for Treasury yields indicates potential downward movement.
GateNews04-18 19:11
Fed Likely to Hold Rates in April at 99.5% Probability, CME Data Shows
The Federal Reserve is highly likely to keep interest rates steady in April, with a 99.5% probability. Looking ahead to June, there's a 94.1% chance of maintaining rates, a 0.5% chance of an increase, and a 5.4% chance of a cut.
GateNews04-17 23:11
Rate Swap Market Signals Dovish Shift, Pricing in 15 Basis Points of Fed Rate Cuts by December
Gate News message, April 17 — The rate swap market is signaling a dovish shift, with current pricing reflecting expectations for 15 basis points of Federal Reserve rate cuts by December.
GateNews04-17 13:01
