White House Stablecoin Talks Halt As Banks Push For Production Limits

Web 3 Journalist

Tim Hackey

Web 3 Journalist

Tim Hackey

Since part of the group

February 2024

About the author

Journalist and copywriter with ten years of experience in music, video games, finance and technology.

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Last Updated:

February 11, 2026

High-level negotiations between US giants and crypto executives at the White House have hit a snag over stablecoin production since yesterday.

Banks have called for restrictive “principles of restraint” on owner rewards, while crypto leaders have argued that such restraints stifle innovation in the digital dollar economy.

Will banking interests kill the product?

The main impetus is the implementation of the GENIUS Act, signed in July 2025, which aims to regulate the supply of stablecoins while covering traditional bank deposits.

Banks argue that interest-bearing stablecoins threaten their liquidity models if they can achieve higher yields on-chain.

This regulatory battle highlights the industry's shift to a compliance-oriented market

The White House Crypto Policy Council is trying to find common ground. Yesterday's meeting was the second this month. The clock is ticking as lawmakers and the industry hope to finalize the rules in time for this November's midterm elections.

Banks are trying to firewall their deposit base from digital competitors, a move that could reduce the competitiveness of non-bank stablecoin issuers.

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In the battle behind closed doors in the White House

According to a filing by banks, including Goldman Sachs and JPMorgan Chase, the banks have issued strict “blocking guidelines.”

These principles call for any restrictions, financial or otherwise, associated with holding or using payment stablecoins. The participating banks have taken a strong position, they have asked for enforcement measures that go beyond the draft of the current market structure.

While current draft laws generally ban active products, banks want to crack down on even activity-based rewards.

Crypto stakeholders, including the Blockchain Association and Ripple, have reportedly “stepped in” against these demands.

The banking sector insists that the scope of exemptions for stablecoin rewards should be very narrow, leaving little room for the kinds of incentive programs that drive DeFi adoption.

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Implications for the market

If these restrictions are upheld, the United States risks stifling the very innovation that the Genius Act was intended to legitimize.

Investors should keep a close eye on the July deadline; Disagreement could force capital to flee to the courts with more transparent production-friendly frameworks.

Just as Venezuela's anti-corruption investigation rocked the local crypto industry with a brutal shutdown, a high-handed US ban on stablecoin production could seriously affect domestic liquidity.

While banks aim to protect their deposit base from disruption, the crypto market views it as a fundamental feature, not a bug.

If the banks win this round, the U.S. regulated supply of Storticoins could be tied to a simple transaction rail, depriving them of their ability to invest.

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