Recently, I noticed a quite interesting policy dispute involving the issue of stablecoin yields. The White House and Wall Street have been at odds over this for a long time, with tensions growing sharper.

Here's what happened. Patrick Witt, Executive Director of the White House’s Digital Asset Advisory Committee, directly criticized traditional banks on April 17, saying they are either greedy or ignorant. The banking industry has been ramping up lobbying efforts recently, trying to block the upcoming CLARITY bill’s provisions on interest-bearing stablecoins. The $320 billion stablecoin market has become the focal point of this contest.

The White House proposed a compromise called the Tillis-Alsobrooks plan, which mainly bans passive income on stablecoin balances but allows activity-based rewards. It sounds like a balanced approach, but the banking industry remains dissatisfied. They claim that even this restricted framework would pose a structural threat to traditional finance, so they continue to pressure senators on the Senate Banking Committee.

Previously, the banking industry even exaggerated, claiming through the American Bankers Association that stablecoin yields could trigger a $6.6 trillion deposit outflow. But a report from the White House’s Council of Economic Advisers directly rebutted this, stating that a complete ban on stablecoin yields would cost consumers $800 million in net costs and would hardly help protect bank loans.

Interestingly, the market has spoken. According to Messari data, the supply growth rate of interest-bearing stablecoins over the past six months has been 15 times faster than the overall stablecoin market. This indicates that demand is indeed there; users clearly want yields.

Time pressure is beginning to show. Senator Tillis said his team is still discussing the compromise text repeatedly, and Alsobrooks indicated it might be released next week. But if the Banking Committee cannot push this bill through by the end of April, the chances of passing it in 2026 are very low. Senator Lummis even warned that if a quick compromise isn’t reached, the bill might be delayed until 2030.

The crypto industry’s stance is very clear: succumbing to banks’ demands would be suicidal. Dan Spuller from the Blockchain Association said this would stifle domestic innovation. Now, it all depends on whether the White House can really withstand the pressure.