US Crypto Regulation Faces Turning Point as $6 Trillion Deposit Risk Looms Over Stablecoin Yield Debate
US crypto regulation is approaching a critical inflection point as policymakers prepare for a decisive February 10 meeting at the White House. At the center of the debate is a single unresolved issue within the broader Crypto Market Structure Bill: whether stablecoin holders should be allowed to earn yield. The administration has imposed an end-of-February deadline, warning lawmakers and industry participants that failure to reach consensus could stall the entire legislative package.
Key Regulatory Flashpoint: Stablecoin Yield
Why Yield Is the Deciding Issue
Despite months of progress on crypto legislation, negotiations have broken down over stablecoin yield. The administration has made it clear that the bill cannot advance unless this issue is resolved. According to participants familiar with the discussions, the legislation is effectively frozen on this one point, with no fallback compromise currently in place.
Banks Warn of Massive Deposit Outflows
Traditional banks have taken a hard stance against yield-bearing stablecoins, arguing that they pose a direct threat to the US banking system. With savings accounts paying roughly 0.3–0.4% and checking accounts offering little to no interest, banks fear that stablecoins offering 3–4% yields could trigger a gradual but massive shift of capital.
Industry groups have warned that as much as $6 trillion in bank deposits could migrate out of traditional institutions if yield-bearing stablecoins become widely adopted. From the banking perspective, allowing yield is not a marginal policy choice—it represents a systemic risk.
Crypto Firms Push Back
Crypto companies see the issue in starkly different terms. For exchanges and stablecoin issuers, yield is not an optional feature but a foundational component of their business model. Industry leaders argue that banning yield would cripple innovation, slow adoption, and effectively tilt the regulatory playing field in favor of banks.
Some crypto firms have reportedly told lawmakers they would prefer no legislation at all rather than accept a framework that restricts yield. From their perspective, a no-yield rule would undermine the competitiveness of US-based crypto products globally.
Why This Matters for US Crypto Regulation
The stakes extend far beyond stablecoins. The House previously passed the bipartisan CLARITY Act in July 2025, and the Senate had been advancing parallel legislation before talks collapsed. With stablecoins now representing hundreds of billions of dollars in market value and facilitating trillions in annual transactions, regulatory paralysis carries significant consequences.
Complicating matters further, the 2026 midterm elections are approaching, narrowing the legislative window. If the current deadlock persists, the entire regulatory effort could be delayed until the next Congress, prolonging uncertainty across the US crypto market.
Outlook Ahead of the February Deadline
As the end-of-February deadline approaches, pressure is mounting on lawmakers to resolve the standoff. A compromise on stablecoin yield could unlock long-awaited regulatory clarity, while failure to act risks pushing crypto regulation into another prolonged limbo.
With banks defending trillion-dollar deposit bases and crypto firms fighting to preserve their core economic model, the coming weeks may determine not just the fate of one bill, but the future structure of money in the US financial system.
Source: Crypto Rover
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