Crypto & Banks: A Love-Hate Showdown Over Stablecoin Cash

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Crypto firms and banks are locked in a high-stakes game of chicken over stablecoin yield rules-just don’t ask who’ll blink first.

Two meetings. No deal. The clock’s ticking like a time bomb-because nothing says “progress” like a stalemate. Three weeks into February, crypto firms and traditional banks still can’t agree on one thing: whether stablecoins should be allowed to pay yield. That disagreement now threatens to stall the Clarity Act before it even gets a shot at the Senate.

As Eleanor Terrett very dramatically flagged on X, the stablecoin yield standoff is back at the top of Washington’s to-do list, and both sides are still worlds apart heading into what could be a third White House sit-down this week. Because nothing screams “resolution” like a third meeting.

Banks Want Yield Dead. Crypto Says Absolutely Not.

Last Tuesday’s White House meeting between senior bank policy staff and crypto reps ended with all the excitement of a nap. Banks circulated a one-pager titled “Yield and Interest Prohibition Principles.” Message? Ban stablecoin yields immediately. No questions. No debate. Just a blunt, corporate-style death threat.

The Digital Chamber, representing 130 crypto firms (and probably a few rogue bankers who’ve seen the light), threw back the bank’s one-pager with a counter-proposal that’s basically DeFi on steroids. Their plan? Let payment stablecoins generate yield in DeFi. Because why not let money work for you if you’re already letting it work against you?

“These principles push to preserve stablecoins as payment instruments, protect DeFi liquidity and dollar dominance, and establish a data-driven framework for assessing deposit impact,” the Digital Chamber said, per Crypto In America. A veritable Shakespearean sonnet, if you ask me.

Banks haven’t formally responded to the Chamber’s document. A Senate Banking Committee source told Crypto In America the proposal was “constructive”-sure. Realistic? Not so much.

Must Read: BlackRock and Robinhood Lead Wall Street’s DeFi Breakthrough – big finance is already moving into DeFi while regulators debate the rules. Classic.

A Third Meeting – But No Date Yet

Patrick Witt, executive director of the White House Crypto Council, told Yahoo Finance another meeting could happen this week. He gave no specific day because of course he didn’t. Both the House and Senate are in recess until Presidents’ Day, so legislative pressure is paused. Because what’s a crisis if you can’t take a holiday?

The yield question isn’t just a policy spat-it’s the reason the Senate Banking Committee can’t schedule a Clarity Act vote. Miss the end-of-month deadline? The bill joins the congressional graveyard. Because nothing’s more fun than a bureaucratic time loop.

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Meanwhile, the CFTC’s quietly tidying up. Chairman Mike Selig appointed a 35-member Innovation Advisory Committee, pulling in CEOs from Coinbase, Ripple, Uniswap, Kraken, Bullish, and Grayscale. Wall Street wasn’t left out; Nasdaq, CME, CBOE, and ICE all got seats. Prediction market platforms Kalshi and Polymarket made the list too. The CFTC’s new committee reads like a who’s who of crypto and traditional finance-because what’s better than throwing all the players into a room and hoping they don’t blow things up?

“By bringing together participants from every corner of the marketplace, the IAC will be a major asset for the Commission as we work to modernize our rules,” Selig said in an official statement. Because nothing screams “modernization” like a group chat with 35 people.

Atkins Faces Senate Fire Over Enforcement Pullback

SEC Chair Paul Atkins sat before the Senate Banking Committee last week. His message? A direct break from Gary Gensler’s “enforce-first” playbook. Clear rules, not enforcement. Tokenized securities = securities. Investor rights to self-custody. Congress needs to pass legislation, or crypto innovators stay stuck in gray areas. Because nothing’s more inspiring than a regulatory limbo dance.

Democrats pushed back hard. They said enforcement has been scaled back and investor protections weakened on his watch. Atkins disagreed. The SEC is still watching fraud and market abuse, he said, but won’t push beyond its legal authority. Because obviously, the legal line is a perfectly reasonable red flag.

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Bo Hines, Tether US CEO and former White House Crypto Council exec, weighed in too. Speaking at the Digital Assets at Duke Conference, his first interview since launching USAT in January, Hines said he’s bullish on stablecoins expanding US dollar dominance globally. On the Clarity Act delays, he was direct: “Most securities will eventually be tokenized,” he told Crypto In America hosts Eleanor Terrett and Gerald. Because what’s more inevitable than the future?

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2026-02-17 15:50