Phones Down, Stakes Up: Inside the Third White House Stablecoin Summit
The White House is done asking nicely. During the third stablecoin yield negotiation on February 19, 2026, administration officials collected participants' phones to keep both sides focused on reaching common ground, according to CoinDesk and sources familiar with the talks. The meeting ran well beyond its scheduled two hours.
The move came with a clear directive. Patrick Witt, Executive Director of the President's Council of Advisors for Digital Assets, told attendees that "certain rewards programs were going to stay in the next draft" of the Digital Asset Market Clarity Act, according to a separate CoinDesk report. That is the first time the White House has publicly staked a position on the yield question rather than playing neutral mediator.
As of February 20, 2026, no final deal has been announced, but both sides described the session as "constructive" and "cooperative," a stark contrast to the total impasse that defined the second meeting on February 10.
The Emerging Compromise: Rewards for Activities, Not Holdings
The framework taking shape would permit stablecoin rewards tied to "certain activities and transactions" while restricting yield on static holdings that "more closely resemble deposit accounts," according to the CoinDesk reporting. In plain terms, crypto platforms could reward users for spending, transacting, or participating in specific programs, but could not simply pay interest on idle stablecoin balances the way a bank savings account does.
This distinction matters enormously. It would protect Coinbase One's current model of offering rewards to active card users while potentially restricting a future scenario where Circle pays 5% APY on USDC balances held in a cold wallet. For the banking industry, it preserves the core argument that pure deposit-like yield should not be permitted outside the banking system. For crypto, it keeps rewards programs alive, which is the immediate priority.
Banking representatives at the meeting "actively worked on language to that end," a notable shift from the one-page "Yield and Interest Prohibition Principles" document that demanded a blanket ban just nine days earlier. The White House will circulate an updated draft to all participants.
Who Was in the Room
The attendee list for the third meeting was deliberately small. Key participants included Ji Kim, CEO of the Crypto Council for Innovation, and Paul Grewal, Chief Legal Officer at Coinbase. Banking industry representatives were present but the specific institutions have not been disclosed.
The shrinking delegation size tracks the classic Washington negotiation pattern: broad stakeholder meetings narrow positions, then small rooms force decisions. The first two meetings included wider representation. This one was designed to produce language, not speeches.
Witt's role has evolved across the three meetings. In early February, he positioned himself as a facilitator. By the second meeting, he told banks to "stop fighting and start competing". Now he is dictating terms: certain rewards will stay. The administration's patience with the banking lobby's maximalist position has clearly run out.
The February Deadline Is Days Away
The White House set an end-of-February deadline for a stablecoin yield compromise that would allow the CLARITY Act to move forward in the Senate Banking Committee. As of February 20, ten days remain.
The CLARITY Act is the most comprehensive crypto market structure legislation currently under consideration. It would establish which digital assets fall under SEC versus CFTC jurisdiction, create a registration framework for crypto platforms, and set rules for stablecoin issuance. The stablecoin yield question has been the single largest obstacle preventing the bill from reaching a floor vote.
If the compromise framework holds, the bill could move to markup in March. If it collapses, the CLARITY Act faces the same fate as every crypto bill before it: death by Senate inaction. The administration clearly does not intend to let that happen, which explains the escalating pressure tactics, from open meetings to confiscated phones.
What This Means for Crypto Card Users and Stablecoin Holders
The emerging "activities, not holdings" framework has direct implications for the stablecoin rewards ecosystem. Card programs that offer cashback, spending rewards, or transaction-based incentives would likely be explicitly protected under the legislation. Programs that pay yield on idle balances, however, could face restrictions.
For users of platforms like Coinbase, Nexo, or DeFi protocols offering stablecoin staking, the distinction between "transaction reward" and "deposit yield" will determine what survives. A 4% cashback reward on card spending is clearly an activity-based reward. A 4% APY on USDC sitting in a wallet is clearly a holding-based yield. The gray area, things like loyalty bonuses, referral rewards on balances, or tiered interest based on spending volume, is where the legal battles will play out once the language is finalized.
The net outcome for users is still likely positive. Any framework that permits transaction-based rewards preserves the core value proposition of crypto cashback cards and spending programs. And the banking industry's initial demand for a total prohibition, which would have threatened every rewards program in the space, appears to be dead.
Three Meetings, One Verdict: The White House Picked a Side
Across three meetings in three weeks, the White House's trajectory has been unmistakable. Meeting one: listen to both sides. Meeting two: the banking lobby shows up with a total ban demand, and talks collapse. Meeting three: the White House confiscates phones, tells banks that rewards are staying, and asks them to draft compromise language instead.
The administration has effectively sided with the crypto industry on the core question. Stablecoin rewards will exist in some form under the CLARITY Act. The remaining negotiation is about scope, not existence. For the banking lobby, which arrived at this process demanding elimination, that is a significant concession to have imposed upon them.
The broader market structure bill still faces hurdles. Democratic negotiators have outstanding demands including restrictions on senior government officials' crypto holdings, fully staffed bipartisan commissions at the CFTC and SEC, and stricter decentralized finance oversight. None of these have been resolved. But the stablecoin yield question was the brick wall, and cracks are now visible.
FAQ
Did the White House really confiscate phones at the meeting? Yes. According to sources cited by CoinDesk, White House officials collected participants' phones during the February 19 stablecoin yield meeting to encourage focused negotiation. The meeting extended well beyond its scheduled two-hour duration.
What is the CLARITY Act? The Digital Asset Market Clarity Act is proposed US legislation that would establish regulatory jurisdiction over digital assets, create registration frameworks for crypto platforms, and set rules for stablecoin issuance. Stablecoin yield provisions have been its primary sticking point.
Will stablecoin rewards be banned? Based on the latest meeting, a total ban appears off the table. The emerging compromise would allow rewards tied to transactions and activities while restricting yield on static holdings that resemble bank deposit accounts.
When is the deadline for a deal? The White House set an end-of-February 2026 deadline for a stablecoin yield compromise, giving negotiators roughly ten days from the February 19 meeting.
How does this affect crypto card rewards? Card programs offering cashback, spending rewards, or transaction-based incentives would likely be explicitly protected under the emerging framework, since these qualify as activity-based rewards rather than deposit-like yield.
Overview
The White House escalated stablecoin yield negotiations to unprecedented levels on February 19, confiscating phones and explicitly stating that certain rewards programs will remain in the CLARITY Act. After three meetings in three weeks, the administration has sided with crypto on the core question: stablecoin rewards will exist, and the only negotiation is over their scope. Banking representatives who arrived at the process demanding a total ban are now drafting compromise language that would permit activity-based rewards while restricting deposit-like yield. Ten days remain before the White House's end-of-February deadline.
Recommended Reading
- The White House Just Scheduled Its Third Stablecoin Yield Meeting in Weeks, and a Small Banking Delegation Says the Endgame Is Near
- CFTC Chair Selig Says the CLARITY Act Is on the Cusp of Becoming Law, Promising a Gold Standard for Crypto Regulation
- Stripe's Bridge Wins OCC Conditional Approval for a National Bank Trust Charter, Putting Stablecoin Issuance Under Federal Oversight
