TL;DR
- The White House mediates between banks and Coinbase over restrictions on stablecoin yield offerings.
- The core dispute is direct competition for customer deposits between traditional and crypto products.
- The meeting aims to forge a compromise to salvage the stalled CLARITY Act legislation.
The White House is convening leaders from Coinbase, major banks, and crypto trade groups for a high-stakes meeting on Monday, February 2, 2026, aiming to resolve tensions over stalled cryptocurrency legislation, particularly the CLARITY Act.
The summit, organized by the White House crypto council under President Trump’s administration, addresses a rift sparked when Coinbase CEO Brian Armstrong withdrew support from the Senate Banking Committee’s draft bill in mid-January. Banks lobbied for provisions limiting crypto exchanges’ ability to offer interest or rewards on stablecoin deposits, fearing deposit flight, while crypto firms view these benefits as essential customer incentives.
Negotiations have dragged on without consensus, delaying a planned Senate markup. The bill seeks to define regulatory roles between different government agencies, but amendments shifted power toward banks, irking crypto advocates.
Banks want restrictions on yields from dollar-pegged tokens to protect traditional deposits. Coinbase argues the measure hampers sector development. The dispute reflects direct competition between traditional banking products and interest-paying crypto services.
Market Structure and Regulatory Oversight Under Debate
The broader CLARITY Act aims to clarify oversight between banking and agriculture committees, but amendments changed the balance of power. Adjustments favored traditional banking interests over crypto industry proposals.
Attendees include lobbying groups like the Blockchain Association, which welcomes the dialogue. Participation from multiple sectors signals administration attempts to mediate between opposing positions.
A compromise could revive the bill for Senate review, aligning with Trump’s pro-crypto push, but failure might postpone the meeting and prolong uncertainty in U.S. digital asset regulation.
Coinbase denies clashes with the White House, framing its stance as principled advocacy. The company maintains proposed restrictions would create unfair competitive disadvantages against crypto products.
Traditional banks fear yield-bearing stablecoins will drain deposits from conventional savings accounts. The concern centers on maintaining stable deposit bases for lending operations.
Armstrong’s withdrawal of support in mid-January surprised lawmakers expecting industry backing. The decision exposed fractures between different factions within the financial sector over how to regulate digital assets.
The February 2 meeting represents a last-ditch attempt to salvage negotiations before legislative deadlines. The White House crypto council seeks to facilitate agreement between previously intransigent parties.
Stablecoin rewards provisions became the main breaking point. Exchanges argue eliminating yield incentives would reduce digital asset adoption among retail consumers.
The Trump administration has signaled priority in developing favorable regulatory frameworks for cryptocurrencies. The meeting reflects high-level political commitment to resolving legislative obstacles.
Crypto trade groups push for regulatory clarity allowing operation without legal ambiguity. Current uncertainty stalls institutional investment and product development.
The Senate Banking Committee planned to mark up the bill before disagreements emerged. Last-minute amendments altered key provisions, triggering Coinbase’s withdrawal.
The Blockchain Association and other industry groups view the summit as opportunity to influence final text. Direct engagement with White House officials elevates the profile of negotiations.
Potential outcomes range from full compromise to total collapse of talks. Failure would leave the U.S. crypto industry without clear regulatory framework for additional months.
Banks maintain that protecting traditional deposits justifies restrictions on competing crypto products. The argument emphasizes financial stability over technological advancement.
Stakeholder Positions Remain Far Apart
Crypto firms contend market forces should determine product offerings rather than protective regulation favoring incumbents. The position reflects broader philosophical divide over innovation policy.
The White House council assembled representatives from competing interests in recognition that unilateral legislation faces implementation challenges. Broad stakeholder buy-in improves enforcement prospects.
Stablecoin deposit competition emerged as unexpected flashpoint in digital asset regulation. Banks initially focused on securities classification, not deposit market share.
Industry observers note the February deadline coincides with broader legislative calendar pressures. Window for compromise narrows as Senate schedule fills with other priorities.
Armstrong’s public withdrawal generated media attention amplifying crypto industry concerns. The tactical move increased pressure on lawmakers to address industry positions seriously.
The meeting format remains undisclosed, though sources suggest structured negotiations rather than open forum. White House staff prepared agenda items addressing specific disputed provisions.
Banking sector representatives prepared detailed economic analysis showing potential deposit migration scenarios. Data aims to justify protective measures as systemic risk management.
Crypto advocates counter with adoption statistics demonstrating consumer preference for yield-bearing products. Numbers support argument that restrictions would disadvantage U.S. firms against offshore competitors.
The CLARITY Act’s fate hinges on Monday’s outcome. Success could establish template for future crypto legislation, while failure might fragment regulatory approach across multiple agencies.
