White House Drafts Stablecoin Bill with Idle-Yield Ban and $500K Penalties
White House presented draft stablecoin legislation that prohibits any yield on idle stablecoin balances, delegates enforcement to the SEC, Treasury and CFTC with $500,000 per violation daily penalties. Attendees, including Coinbase, Ripple and Andreessen Horowitz, debated narrower language allowing only activity-linked rewards while banks secured an anti-evasion enforcement win.
1. White House Leads Stablecoin Bill Talks
The White House Crypto Council convened a focused session with draft legislation text brought by deputy Patrick Witt, marking a shift from industry-led meetings. Participants included Coinbase, Ripple, Andreessen Horowitz, the Blockchain Association and Crypto Council for Innovation, while banks were represented by the American Bankers Association, Bank Policy Institute and Independent Community Bankers of America.
2. Yield Prohibition and Enforcement
Draft language removes the ability to earn yield on idle stablecoin balances and limits any rewards to specific user activities. Enforcement authority is granted to the SEC, Treasury and CFTC with civil penalties of $500,000 per violation per day, reflecting banks’ anti-evasion priorities.
3. Banking Lobby Secures Anti-Evasion Win
Bank trade groups secured strict anti-evasion provisions and are pushing for a deposit outflow study to assess stablecoin impact on traditional deposits. Talks aim for an end-of-month compromise, with follow-up briefings and further negotiations set in the coming days.