
White House Proposes Limits on Stablecoin Rewards in CLARITY Act Talks
White House narrows stablecoin rewards in Senate negotiations
Senior White House officials convened representatives from the cryptocurrency sector, trade groups and the banking industry to try to hammer out clause-level language on whether stablecoins may carry recurring, yield-like rewards — a central sticking point holding up the CLARITY Act in the Senate.
Administration advisers and participants described a concrete proposal that would confine third‑party reward mechanics to activity‑based payments — rewards tied to transactions or other customer actions — and bar interest‑like payouts on held balances, a move intended to reduce deposit‑replacement risk for banks.
Several sources characterized the session as substantive and long: attendees reported it ran more than two hours, and the White House has urged the parties to deliver specific drafting proposals within weeks to convert private assurances into committee‑ready text.
The convening was the latest in an intensive stretch of contacts — the White House counts this as the third session in 16 days with banks and crypto firms — reflecting a shift from public posturing to clause‑level bargaining and closer SEC–CFTC coordination aimed at limiting overlapping jurisdictional signals.
Executives from platforms including Coinbase and Ripple participated, even as other reporting has highlighted that Coinbase previously paused or withdrew a public endorsement of an earlier draft — underscoring a split between private engagement and public positioning.
No final statutory language was agreed, and negotiators face competing procedural pressures: markups have been delayed after wavering backers, and some staffers are weighing mechanisms — such as conditioning the statute’s effective date on the Commodity Futures Trading Commission achieving a quorum — that would tie confirmation fights to legislative bargaining.
Outside the rooms, industry behavior is mixed. Some firms are tightening or pausing product rollouts pending clarity, while spot crypto products have continued to attract inflows; international developments like Europe’s MiCA regime are also influencing where teams prioritize deployments.
If lawmakers adopt a transaction‑only reward model, custodial exchanges and wallets will likely redesign offerings toward activity‑linked fees and rebates, preserving revenue without paying interest on balances — a shift that could compress margins for smaller competitors and amplify the role of regulated intermediaries.
Practically, a transaction‑only rule is administratively straightforward but technically porous: platforms could engineer micro‑transaction schemes or rebating loops that mimic balance yields unless the statute includes explicit anti‑avoidance tests and telemetry thresholds, a concern flagged by negotiators and policy analysts.
With limited weeks to turn executive‑level understandings into precise statutory clauses that can survive committee scrutiny, expect sustained shuttle diplomacy, interagency coordination, and a focus on narrowly tailored amendments in the near term as lawmakers try to balance financial‑stability safeguards with industry competitiveness.
Read Our Expert Analysis
Create an account or login for free to unlock our expert analysis and key takeaways for this development.
By continuing, you agree to receive marketing communications and our weekly newsletter. You can opt-out at any time.
Recommended for you
U.S. White House Brokers Crypto Talks as Stablecoin Yield Fight Stalls Progress
The White House convened senior industry and banking representatives to try to bridge a standoff over whether stablecoins should be allowed to offer yield, but negotiators left without resolving the core dispute and were pressed to deliver concrete drafting proposals within weeks. The effort comes amid wavering industry endorsements, paused committee activity and tactical bargaining over items such as conditioning the law’s effective date on CFTC staffing, all of which heighten the odds of delay absent rapid technical compromises.

CLARITY Act gains momentum as Coinbase signals compromise
Sen. Bernie Moreno says the CLARITY Act could clear Congress within about a month as Coinbase’s Brian Armstrong signals a renewed path to agreement. Lawmakers and industry continue clause-level bargaining after a pulled markup; the White House and committees have convened targeted discussions to resolve sticking points over stablecoin yields and regulator designation.

Davos Cold Shoulder: Big U.S. Banks Push Back on Coinbase Over Stablecoin Rules
At Davos, Coinbase CEO Brian Armstrong was met with curt and dismissive responses from several leading U.S. bank chiefs as he lobbied against language in an active Senate stablecoin bill. The exchanges at the World Economic Forum track with a broader, paused CLARITY Act process — including a looming Agriculture Committee markup and a White House convening — that will decide whether non-bank platforms can offer repeat, interest‑like payouts on stablecoins.
Regulatory Fault Lines Are Reordering Stablecoins — GENIUS Act and MiCA Point Toward a Two-Tier Future
New U.S. and EU rules are redefining what it means for a stablecoin to function as cash by hardening redemption rights and access to reserves under stress. The result will be a bifurcated market where legally protected, highly liquid tokens behave like money in crises while other issuers trade like credit instruments when redemption pressure rises.

HSBC: Coinbase Withdrawal Won’t Kill U.S. Crypto Market-Structure Push
Coinbase publicly withdrew support for a congressional market-structure draft, creating friction for near-term markups, but HSBC analysts say a narrower, committee-level compromise could still deliver the statutory certainty institutions seek. The White House has scheduled a targeted convening next week—organized by its digital-assets advisory council—to try to resolve a specific dispute over reward-like incentives tied to stablecoins, a move that could produce language suitable for quick committee amendments.
Bessent Rebukes Crypto Opponents as Senate Hustles Toward a Digital-Assets Market Structure Law
Treasury Secretary Scott Bessent used testimony before the Senate Banking Committee to urge quick passage of the Digital Asset Market Clarity Act, warning that U.S. leadership in digital finance is at stake. His remarks came amid a stalled markup after key industry backers withdrew support, a White House convening to seek compromises, and technical committee fights over CFTC staffing, stablecoin yield restrictions and DeFi carve-outs.

Japan’s FSA Proposes Tight Rules for Stablecoin Reserves Ahead of 2025 Payments Reform
Japan’s Financial Services Agency opened a consultation on draft rules that would restrict which foreign bonds can back regulated stablecoins and add new oversight for intermediaries. The proposals set high credit and issuance-size thresholds, mandate clearer customer disclosures from bank subsidiaries, and require assurances about foreign issuers’ activity in Japan, with the consultation closing Feb. 27, 2026.

Coinbase pilots Flipcash’s USDF as it prepares white‑label stablecoin offering for businesses
Coinbase has activated a backend test of USDF, a stablecoin developed by Flipcash, as part of a new product that will let companies issue dollar‑pegged, branded tokens collateralized with USDC. The feature aims to generate new revenue streams and cross‑chain utility for corporate treasury, payments and payroll use cases while deepening Coinbase’s role in stablecoin custody and distribution.