#WhiteHouseTalksStablecoinYields The White House has convened high-level discussions on whether stablecoin issuers can offer yields or rewards on payment stablecoins, part of ongoing efforts to finalize the stalled CLARITY Act — the legislation aiming to set clear rules for digital assets while protecting consumers and the financial system.

Key Takeaways:
• Senior officials met with major banks and crypto firms to negotiate yield policies.
• Banks proposed broad prohibitions on yields, citing risks to deposit stability.
• Crypto firms pushed back, warning that strict bans could stifle innovation and drive activity offshore.
• Limited compromises, like transaction-based incentives, were discussed but no final agreement was reached.
Why It Matters:
Stablecoins are crucial for trading, payments, and liquidity management. Rules on yields will determine their competitiveness vs. traditional finance and appeal to both retail and institutional users. The debate highlights the tension between banking stability and digital finance innovation.
Next Steps:
• Lawmakers aim for a compromise by early March before the CLARITY Act moves in the Senate.
• Without agreement, uncertainty for U.S. stablecoins will continue, delaying regulatory clarity.
Market Implications:
• Strict bans could slow growth and push innovation overseas.
• Flexible frameworks could encourage adoption and capital inflows into regulated digital products.
The outcome will shape the trajectory of stablecoins in the U.S. financial system for years to come.