The White House is advancing strict rules that would prohibit offering yield or interest on payment stablecoins. Draft provisions include civil penalties of $500,000 per violation per day, targeting attempts to bypass restrictions. The measures emerged during ongoing discussions with crypto industry leaders and banking trade groups.
The White House is advancing strict regulatory measures that would prohibit offering yield or interest on payment stablecoins. Proposed enforcement provisions include civil penalties of $500,000 per violation.
Discussions are focused on preventing firms from structuring products that resemble yield farming on stablecoin balances. The draft language clarifies that restrictions on rewards would be narrow in scope.
Details from the administration’s third meeting with crypto industry leaders were shared by journalist Eleanor Terrett. The session included representatives from Coinbase, Ripple, and a16z, along with trade groups.
During the meeting, White House Crypto Council Executive Director Patrick Witt presented the draft text. The language acknowledged concerns raised by financial institutions in earlier discussions.
Under the current direction, earning yield on idle stablecoin balances appears to be off the table. Talks now center on whether firms can offer rewards tied to certain user activities.
One crypto-side attendee told Terrett that bank concerns appear driven more by competitive pressure than deposit risk. A bank-side source noted trade groups are pushing for a deposit outflow study in the proposal.
The proposed anti-evasion language would grant enforcement authority to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This includes daily penalties for firms attempting to bypass restrictions.
Public statements from attendees were described as “productive” and “constructive.” People familiar noted the White House took the lead in guiding this round of talks.
Bank trade groups will now brief members on the latest developments to assess room for compromise. An end-of-month timeline for progress appears realistic, with negotiations set to continue.
