The closed-door meeting on February 10th at the White House focused on resolving the debate over interest-paying stablecoins between traditional banks and the cryptocurrency industry, as the CLARITY Act continues to be stalled in the Senate after its passage by the House of Representatives in July 2025.
The White House plans to hold a closed-door meeting of senior banking and cryptocurrency leaders on February 10, focusing on stablecoin policy in an effort to find common ground on issues stalling the CLARITY Act . This meeting will be the second round of dialogue after the first on February 2 yielded little progress, reflecting escalating tensions in Washington as the two sides struggle to reach an agreement.
The key point of contention is whether stablecoin issuers should be allowed to pay interest to holders, which is XEM as one of the biggest hurdles hindering the bill's progress. Senior leaders from major banks like JPMorgan, which view interest-bearing stablecoins as an existential threat to the industry, will attend the meeting.
Their primary concern is that these assets could create an unregulated parallel banking system, leading to Capital outflows from the traditional banking system and severely damaging the U.S. economy.
Conversely, cryptocurrency businesses argue that removing interest payments on stablecoins would stifle innovation amid rapidly increasing global competition in decentralized finance. Tuesday's meeting will provide an opportunity for both sides to further present their arguments, while pressure from the White House mounts to reach an agreement before the end of the month.
The deadlock surrounding the CLARITY Act
The CLARITY Act (HR 3633), proposed by the U.S. Congress, aims to establish a clear and comprehensive legal framework for digital assets while creating room for innovation. The bill was passed by the House of Representatives in July 2025, but has since faced numerous obstacles in its Senate XEM . Despite significant bipartisan consensus on the need for a clear regulatory framework for digital assets, progress remains stalled regarding the legal status of interest-bearing stablecoins.
Interest-bearing stablecoins are a type of digital asset typically Peg 1:1 to the US dollar, but unlike traditional stablecoins, they generate passive income by paying interest to holders. Traditional financial institutions consider this type of stablecoin a balance sheet risk due to its significantly higher yields compared to bank deposit interest rates.
Meanwhile, leaders in the cryptocurrency industry argue that banning interest payments would stifle innovation and severely restrict consumer choice, claiming that the traditional financial stance is primarily aimed at maintaining banks' control over the U.S. financial system.
The controversy surrounding stablecoin policy has intensified competition between the two industries, gradually transforming into a confrontation over the future structure of the US financial system. As both sides held their ground, the White House emerged as a mediator through a series of closed-door meetings between industry leaders and the White House Committee on Crypto Assets.
Last week's initial meeting was exploratory, involving representatives from the industry and trade associations, laying the groundwork for the third round of discussions. Unlike the first round, senior leaders from banks and the crypto asset industry are expected to attend the next round of negotiations in person.
The White House has pressured both sides to reach a conclusion before the end of this month to prevent the CLARITY Act from losing further momentum in the Senate. This increases the importance of reaching a temporary agreement at Tuesday's meeting, although the final outcome remains uncertain.
Progress is likely to occur if both sides agree on a framework outlining how to regulate interest-bearing stablecoins without destabilizing the banking system.
