Efforts by the White House to finalize a long-anticipated crypto market-structure bill hit another roadblock on Monday, after hours of negotiations ended without agreement on one of the most divisive issues in the debate: whether stablecoins should be allowed to generate yield for users.
The meeting, held at the Eisenhower Executive Office Building adjacent to the White House, brought together representatives from banking associations, crypto industry groups, and companies, including Coinbase Global Inc, according to Bloomberg. Despite a months-long push to bridge differences, participants left without a clear resolution on whether exchanges and other platforms should be permitted to pay yield or rewards on stablecoins held by customers.
Industry Memo Reveals Ongoing Disagreements
According to a memo circulated afterward by the Digital Chamber, the session focused on comparing existing policy proposals and identifying points of friction between the banking and crypto sectors. While no consensus emerged, the memo described the meeting as the first in a series of discussions the administration hopes will lead to an agreement before the end of February.
The stablecoin yield question has become a critical stumbling block for the broader market-structure bill, which the administration wants to advance through Congress. The issue already derailed deliberations within the Senate Banking Committee last month, revealing deep divisions over how stablecoin products should be treated under federal financial rules.
A separate version of the market-structure bill has already advanced through the Senate Agriculture Committee and passed the House. President Donald Trump has publicly endorsed the effort, telling an audience in Davos that he intends to sign the legislation “very soon” once it reaches his desk.
Banks and Crypto Firms Push Competing Agendas
Much of the tension centers on competing priorities from the banking and crypto industries. Banks have urged lawmakers to prohibit yield on stablecoins, arguing that such products could trigger an outflow of deposits into higher-return digital assets, reshaping liquidity across the financial system. Crypto platforms, meanwhile, contend that yield products simply reflect technological innovation and competition, and that customers benefit when platforms are able to offer returns on stablecoin holdings.
Patrick Witt, the executive director of the President’s Council of Advisors for Digital Assets, acknowledged the difficulty of the negotiations but described the latest session as constructive. Witt has been among the officials encouraging both sides to find a compromise, warning that without a durable regulatory framework, the crypto sector will remain vulnerable to political shifts. The contrast between the pro-industry stance of the Trump administration and the stricter approach taken by regulators under Joe Biden has made the need for a long-term legislative foundation more urgent.
The legislative uncertainty has coincided with a broader downturn across digital assets. Market sentiment has weakened in recent months, with Bitcoin trading nearly 40% below its October peak, a slide many analysts attribute in part to regulatory ambiguity and the lack of progress on Capitol Hill.
As the administration prepares for additional rounds of negotiation, the stablecoin yield debate has emerged as the pivotal test for whether Washington can craft a regulatory structure capable of supporting innovation without destabilizing the traditional financial system. For now, both sides appear entrenched, and the fate of the bill remains as unsettled as the markets it seeks to govern.
