On the evening of February 20, 2026, East Eight Time, the White House held its third closed-door meeting regarding the issue of stablecoin yields at 9:00 AM Eastern Time. Participants included representatives from the cryptocurrency industry and traditional banking sector, as well as the White House policy team. The superficial topic of the meeting was whether and how to allow related products to pay yields to holders, while the deeper focus was on who should benefit from the "dollar interest dividend" when substantial interest is generated from the reserves backing these assets. Against the backdrop of high interest rates and regulatory games, the clash between the cryptocurrency camp and traditional banks over the attribution of yields and regulatory red lines has made the meeting a key part of the atmosphere influencing the legislation surrounding the "CLARITY Act" and the trajectory of U.S. cryptocurrency regulation. Although the conclusions have not yet been made public, they have already become an invisible barometer closely monitored by the market.
From Zero Interest to Seizing Interest: A Shift in the Yield Narrative of Stablecoins
● Narrative Contrast: Early dollar-denominated cryptocurrencies often promoted "zero yield, safe payment" as their main selling point, emphasizing convenience and stability similar to bank deposits while intentionally downplaying their link to interest rate environments. However, with the current macro backdrop of relatively high interest rates in the U.S., the returns from holding short-term government bonds and monetary instruments can no longer be ignored. Products originally packaged as "pure payment tools" are beginning to expose the significant reality gap in their potential interest earnings.
● Yield Attribution: In the current mainstream model, issuers typically invest the fiat currency reserves they receive into short-term government bonds, reverse repos, or money market instruments, obtaining stable interest spreads through scale and duration management, while ordinary holders only enjoy nominal redemption and on-chain liquidity without receiving any yields linked to interest rates. This structure, where "the issuer pockets all the interest while users gain zero yield," has been increasingly questioned by numerous market participants regarding its legitimacy and transparency, especially as U.S. Treasury yields rise.
● Legal Characterization: Once related products directly pay yields to holders, regulators must address a key question: should these assets be regarded as regulated liabilities akin to bank deposits, or closer to investment products that pay dividends and must comply with securities rules? Different characterizations will trigger entirely different regulatory frameworks, capital requirements, and information disclosure obligations, also altering the licensing and business boundaries among banks, brokerages, and cryptocurrency service providers.
● The Game of "On-Chain" Yields: Essentially, this closed-door meeting at the White House is discussing whether and in what legal form yields can be "on-chain" returned to the holders: whether through variable-rate allocations, discounted issuance structures, or through third-party products. Each path corresponds to a different regulatory approach to risk assessment and reflects the differing methods of profit-sharing between traditional finance and emerging cryptocurrency infrastructure.
Direct Clash Over Yield Attribution Between Banks and the Cryptocurrency Camp
● Bank Defenses: Traditional banks are concerned that if this type of product pays interest safely and transparently within a framework approved by regulators, it could functionally approach high-liquidity money market funds and deposit accounts, directly connecting consumer and institutional cash management needs. For banks that rely on a deposit base and net interest margin for survival, this presents a structural risk of deposits flowing into on-chain asset pools, thereby compressing interest income and credit expansion capacity.
● Cryptocurrency Demands: The cryptocurrency industry is trying to push for the legalization of "yield-paying" products under compliance, advocating to return part of the dollar interest dividends to actual holders, in order to enhance the attractiveness of dollar-denominated assets within the global on-chain ecosystem. For them, the yield function is not only an upgrade to their business model, but also a necessary weapon to compete for liquidity against other offshore markets, hoping to elevate from a "pure payment tool" to a "compliant yield-bearing vehicle."
● Closed-Door Gaming Field: The White House's third closed-door meeting plays more of a role in creating a closed gaming field for both sides rather than simply offering support or rejection to one party. The discussions centered on regulatory red lines, risk bottom lines, and potential pilot paths for technical discussions, including which yield structures would be viewed as overly similar to deposits and which disclosure requirements would help mitigate systemic risk, rather than reaching a complete system on the spot.
● Topic Upgrade: Notably, this is already the third closed-door discussion regarding yield issues, indicating that the relevant topics have evolved from marginal "technical details" to major questions concerning the internal redistribution of interests within the financial system. The focus of discussions has shifted from "whether to allow the existence of certain innovative products" to "how to redraw the yield boundaries between on-chain and off-chain dollar assets without disrupting the banking system and monetary transmission mechanisms."
Regulatory Path Rehearsal Under the Shadow of the CLARITY Act
● Bill Positioning: The "CLARITY Act" is positioned as a key piece of legislation aimed at providing a clearer and more transparent regulatory and market structure framework for the U.S. cryptocurrency industry and has recently become the focus of congressional discussions. Its goal is to delineate the regulatory ownership of different categories of cryptocurrency assets, clarifying which are under the jurisdiction of securities regulators and which are closer to commodities or payment tools, thus providing relatively stable rules for industry development.
● Expectations vs. Reality: In public market comments, Bernie Moreno has stated that the bill is expected to pass in Congress before April, but this is closer to an optimistic expectation rather than a set timetable. The legislative process is constrained by political games, regulatory consensus, and changes in the macro environment, so any specific timing judgments carry high uncertainty, and the market can only regard this as one of several scenarios rather than a "hard date" to trade on.
● Challenges in Yield Clauses: The design surrounding yields for related assets is likely to become a "challenge clause" in bills like the CLARITY Act. How yields are articulated, under what conditions additional regulatory obligations are triggered, and whether special licenses are needed will have widespread implications. This closed-door meeting at the White House seems more like a pressure test and rehearsal of these sensitive boundaries on the eve of legislation to clarify each party's bottom line before the official text takes shape.
● Atmosphere Influence Over Textual Binding: Based on the available information, it cannot and should not be asserted that there is a direct textual binding relationship between this closed-door meeting and the CLARITY Act. However, the discussion atmosphere of the meeting, the way risks are articulated, and the tolerance for innovation may invisibly influence the "political temperature" in subsequent congressional negotiations, determining whether the bill shifts toward a more conservative or more open direction.
Invisible Feedback Loop Between Prediction Markets and White House Decision-Making
● Market Signal Tools: Federal Reserve researchers have repeatedly emphasized that data from prediction market platforms like Kalshi can more real-time reflect market expectations for inflation and interest rate paths, providing policymakers with a macro measure based on market prices. Compared to lagging traditional statistical data, these market prices consolidate multi-faceted information and sentiment to a degree, making them particularly sensitive to shifts in expectations.
● Interest Rate Environment Tug: All debates surrounding stablecoin yields are firmly anchored in the current interest rate environment. As long as short-term rates remain relatively high, the interest generated from reserves becomes a massive economic resource, meaning that regulators will inevitably be cautious of market pricing for future interest rate paths and financial risk premiums when designing rules to avoid realizing systemic mismatches only in the later stages of the cycle.
● New References for Regulatory Assessment: It can be anticipated that in future discussions around yield structures, regulators may incorporate prediction market data into their evaluation toolbox to assess whether certain policy options would amplify risk appetites, trigger large-scale capital migrations, or alter market demand structures for safe assets. This does not mean that market prices will directly dictate regulatory decisions, but they will play a more significant role in stress testing and scenario analysis.
● Potential Feedback Loop: This creates a potential "feedback loop" between traditional macro tools and new cryptocurrency market signals: decision-makers observe prediction markets and on-chain asset prices to calibrate policy expectations, while policy discussions and legislative trends in turn influence the pricing of these markets. Currently, this mutual observation mechanism remains highly uncertain, as it could enhance policy foresight or, when information noise is too high, amplify short-term volatility.
Directional Choices and Time Windows After the Closed-Door Meeting
The core issue reflected from the White House's third closed-door meeting is how U.S. regulation balances protecting the stability of the traditional banking system with allowing new types of assets to share more dollar interest dividends. On one end is the traditional banking system that sustains the deposit base, credit creation, and efficiency of monetary transmission, while on the other is the rapidly expanding on-chain dollar assets that demand yield return to users. The clash between the two in a high-interest rate cycle makes it difficult for regulators to simply respond with "support or suppress innovation."
Against the backdrop of the CLARITY Act's legislative expectations coupled with the current high-interest rate cycle, the regulatory attitude surrounding yields is likely to become an early indicator of the direction for U.S. cryptocurrency regulation. Whether the end choice is to "limitedly release" through higher capital requirements and strict information disclosures, or to "mildly restrain" through category restrictions and caps, it will leave a clear policy fingerprint on yield clauses. However, it is important to emphasize that currently available public information does not include specific details regarding the meeting's agenda or outcomes, so any judgments about proposal designs or timelines can only be speculative based on existing signals rather than factual statements.
In the coming months, observation windows will largely concentrate on two clues: first, the actual advancement rhythm of the CLARITY Act in Congress and whether it can reach a critical node around the rumored date of April; second, whether regulatory agencies will respond indirectly to the contentious focal points revealed around yield clauses in this closed-door meeting through public hearings, guiding statements, or policy drafts. For industry participants, grasping this policy and legislative intersection period may determine the upper limit and starting point of the next round of compliance for dollar-denominated assets.
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