The White House will convene the second round of key cryptocurrency meetings next week (after February 10). There is only one core issue, but it is highly contentious: how to restrict or even prohibit stablecoins from paying yields to holders. The outcome of the meeting could very likely snuff out or ignite the last hope of the pending (CLARITY Act) legislation.
The banks' fear: $6.6 trillion deposits 'pulled from under them'.
In recent years, lobbying groups from the U.S. banking industry, the Treasury Department, and analysts from top investment banks have repeatedly warned of the same nightmare: the booming development of stablecoins could siphon off as much as $6.6 trillion in deposits from the U.S. banking system. This amounts to more than one-third of total bank deposits in the U.S.
The logic is frighteningly simple. You deposit money in a bank, and the interest rate for checking accounts is almost negligible. But if you convert dollars into stablecoins like USDC or USDT and place them on certain compliant platforms, you can easily earn a few percentage points in annualized returns. This calculation is clear to ordinary users. Over time, money naturally flows from the low-interest accounts of banks to yield-bearing products in the crypto world. This is so-called 'financial disintermediation'—capital bypassing traditional intermediaries to seek higher returns.
Deposits are the source of bank lending and the lifeblood of profits. Without deposits, banks become a tree without roots. They are particularly worried that deposits from interest-sensitive businesses and the wealth of affluent individuals will be the first to 'flee.' The sudden collapse of Silicon Valley Bank (SVB) has demonstrated how quickly a run can occur once deposit confidence is shaken.
Stablecoins, in the eyes of bankers, are the next potential 'financial accelerators' that could trigger a bank run.
The deadlock of the bill: How the dispute over yields is choking the (CLARITY Act).
This bill, aimed at establishing a comprehensive regulatory framework for the U.S. crypto market, has been debated in Congress for months, with processes repeatedly stalling. One of the core and most contentious issues is whether stablecoins can pay interest or rewards to holders.
Currently, the direction of the draft clearly leans toward traditional banking. The (CLARITY Act) or its sister bill (GENIUS Act) may prohibit stablecoin issuers from directly paying interest based on holdings to holders.
However, the crypto industry is not without room to negotiate. The bill discussion left a loophole: allowing 'activity-based rewards.' This means that rewards earned through 'active behaviors' such as providing liquidity, participating in staking, or frequent trading may be permitted. But static yields from simply depositing coins and earning interest will not be allowed.
The banking industry believes that as long as 'mindless' static yields are prohibited, the allure of stablecoins for depositors can be significantly weakened. However, the crypto industry, especially major platforms like Coinbase that offer stablecoin yield services, sees this as a matter of life and death. The CEO of Coinbase has openly and strongly opposed this restriction, even threatening to withdraw support for the bill. They argue that this would stifle innovation in the U.S. and push users and capital toward overseas markets with looser regulations.
Next week's meeting at the White House aims to try to untangle this deadlock. If banks and the crypto industry can find even a shred of consensus on this core disagreement, the (CLARITY Act) may break through the obstacles. Conversely, if neither side budges, this bill, which has high hopes riding on it, is likely to remain indefinitely shelved, or even stillborn. Some analyses suggest that the probability of its passage in 2026 is only around fifty-fifty.
A huge wave is coming: Have the 'good days' of USDC come to an end?
If the banks' will is ultimately realized through legislation, the shockwaves will first and directly hit mainstream compliant stablecoins like Circle's USDC and Paxos' BUSD.
Their current business models will face fundamental reshaping. Currently, these stablecoin issuers invest user funds in safe assets like government bonds and then return part of the profits to users, which is a significant source of their appeal and competitiveness. Once 'static holding yields' are banned, this most direct customer acquisition path will be severed.
At that time, we may see:
Disappearance of yield products: Services like Coinbase Earn, which directly pay interest on USDC holdings, are likely to become history.
Forced model transformation: Platforms will fully focus on promoting 'activity-based rewards.' However, this has a higher threshold and a more complex experience, raising a big question mark on whether it can attract an equivalent scale of funds.
Diminished competitive advantage: Compared to traditional bank accounts that can offer deposit interest, the appeal of stablecoins will be significantly reduced. Unless they possess overwhelming advantages in other features such as payment speed, cross-border convenience, or programmable money, their growth engines will be severely impaired.
