The White House is convening a high-stakes meeting today (February 2, 2026) between major crypto firms and traditional banks to resolve the most contentious issue blocking U.S. crypto legislation: whether stablecoins can pay yield to holders.
The outcome could fundamentally reshape how crypto cards reward users—and determine whether $500 billion flows out of traditional banking by 2028.
What's Being Decided Today
The CLARITY Act, a landmark crypto market structure bill, has stalled over a last-minute provision that would ban crypto firms from offering interest or yield on dollar-pegged stablecoins like USDC, USDT, and DAI.
The battle lines:
Banks' position:
- Stablecoin yield would pull $500B from bank deposits by 2028
- Community and regional banks face existential deposit flight risk
- Want federal ban on stablecoin interest to protect traditional banking
Crypto firms' position:
- Yield-bearing stablecoins accelerate adoption and capital inflows
- U.S. would fall behind global competitors (EU, Asia already allow it)
- Banning yield is protectionist overreach that stifles innovation
According to Yahoo Finance, the meeting will be led by David Sacks (White House AI and Crypto Czar) and Patrick Witt (President's Digital Asset Council director).
Who's in the Room
Crypto side:
- Coinbase
- Circle (USDC issuer)
- Ripple
- Kraken
- Major crypto lobbying groups
Banking side:
- Top Wall Street banks
- Community and regional bank representatives
- Financial regulators
This is the first time the White House has directly intervened to broker a compromise on crypto legislation.
Why This Matters for Crypto Card Users
If stablecoin yield is allowed:
✅ Cards like Gnosis Pay and Tria could offer native yield on stablecoin balances (currently limited to off-chain mechanisms)
✅ Exchange cards (Crypto.com, Binance, Coinbase) could integrate yield-bearing stablecoins into cashback programs
✅ DeFi card integration becomes more attractive (e.g., Aave's yield-bearing aUSDC as a spending source)
✅ Higher effective rewards as stablecoin yield stacks with cashback (e.g., 4% yield + 2% cashback = 6% total)
If stablecoin yield is banned:
❌ Status quo preserved: Cards continue relying on traditional cashback and points systems
❌ Innovation exodus: U.S. crypto card issuers face competitive disadvantage vs European/Asian rivals
❌ Regulatory uncertainty: Without clarity, card issuers won't risk integrating stablecoin yield
The $500 Billion Deposit Fight
Banks' core fear: If stablecoins pay 4-5% yield while traditional savings accounts pay 0.5-1%, deposit flight becomes inevitable.
The math:
- U.S. bank deposits: ~$18 trillion
- Estimated stablecoin-accessible deposits: $2-3 trillion
- Projected migration by 2028 if yield allowed: $500 billion
For community banks operating on thin margins, losing even 5-10% of deposits to stablecoins could trigger a liquidity crisis.
What Crypto Cards Are Watching
Gnosis Pay: Self-custody cards already integrate DeFi protocols. If stablecoin yield becomes legal, Gnosis Chain's native yield mechanisms (staking, lending) could flow directly into card balances.
Crypto.com Card: Currently offers CRO staking rewards. If USDC yield is legalized, Crypto.com could pivot to stablecoin-native rewards (simpler UX, no lock-ups).
Coinbase Card: Already offers 4% back on USDC spend in certain markets. Legal stablecoin yield would let them offer compound rewards (yield on cashback USDC).
How the Compromise Might Look
Industry insiders expect a tiered approach:
- Consumer stablecoins: Yield allowed up to $10K-$50K (retail users)
- Institutional stablecoins: Yield allowed for qualified buyers
- Reserve requirements: Stablecoin issuers must hold 1:1 USD reserves (no fractional banking)
- Bank partnership mandates: Crypto firms must custody reserves at FDIC-insured banks
This would protect community banks (retail deposits stay local) while allowing institutional crypto adoption to proceed.
What Happens If They Deadlock
If today's meeting fails to produce consensus:
- CLARITY Act remains stalled (potentially indefinitely)
- Regulatory limbo continues for crypto card issuers
- State-by-state fragmentation as jurisdictions pass conflicting laws
- Innovation moves offshore to EU, Singapore, UAE
The White House reportedly views this as a make-or-break moment for U.S. crypto policy coherence.
Bottom Line for Crypto Card Holders
Today's meeting will likely determine:
- Whether your stablecoin balance can earn yield natively (or only via off-chain custodians)
- Whether U.S. crypto cards can compete with European yield-bearing alternatives (Gnosis Pay, IBAN-linked cards)
- Whether the next generation of cards offers yield + cashback stacking
If you hold a crypto card in 2026, the outcome of this White House showdown matters more than any single card launch, tier adjustment, or rewards change.
The question isn't whether stablecoin yield is coming—it's whether American cardholders will have access to it, or whether they'll need to bank offshore.
Watch: Follow @CoinDesk and Coingabbar for live updates from the meeting.
