The White House just told banks to get comfortable with stablecoin rewards.
After three closed-door meetings between crypto firms and banking trade groups (the latest running well past its scheduled two hours, with phones collected at the door), the administration’s position has crystallized. Some form of stablecoin rewards will be part of the next crypto market structure bill. The only negotiation left is scope. That’s a significant shift from even a month ago, and it tells you where the center of gravity in Washington has moved.
Here’s what mattered over the past few weeks.
The Stablecoin Yield Standoff Narrows
The February 19 White House meeting was the third attempt to bridge the gap between banks and crypto firms on the most consequential question in digital asset policy right now: can stablecoins pay yield?
The answer, per the White House team led by crypto adviser Patrick Witt, is a qualified yes. Yield on idle stablecoin balances (the thing banks feared most) is effectively dead. But activity-based rewards tied to transactions and specific use cases are still on the table. The proposed compromise includes anti-evasion teeth: the SEC, Treasury, and CFTC would enforce an idle-yield ban with civil penalties up to $500,000 per violation, per day.
Banks showed up with the same argument they’ve been making since the GENIUS Act passed last July, that stablecoin rewards of any kind threaten deposit bases, especially at community banks. Crypto firms (Coinbase, Ripple, and a16z were in the room) pushed back that restricting all rewards makes stablecoins less competitive than existing fintech products.
Witt has said the gap has “shrunk considerably.” The soft deadline for a joint proposal is the end of this month. If they land it, the language goes into the next draft of the Clarity Act. If they don’t, the Senate Banking Committee moves forward anyway, just without the bipartisan cover that makes the bill passable.
Why it matters for banks: The compromise framework will determine whether stablecoins function as a deposit alternative or a payments utility. Banks that aren’t tracking the specific contours of the activity-based rewards language are going to be caught flat-footed when the rules land.
Seven Federal Charters and Counting
Crypto.com received conditional OCC approval on February 23 for a national trust bank charter, making it the seventh crypto-native firm to earn one since the wave began in December.
The full roster: Circle, Ripple, BitGo, Paxos, and Fidelity Digital Assets were approved simultaneously in December 2025. Bridge (Stripe’s stablecoin infrastructure arm) followed in early February. Now Crypto.com joins with what it’s calling the Foris Dax National Trust Bank, focused on institutional custody, staking, and trade settlement.
None of these charters allow deposits or lending. They’re trust banks, not full-service institutions. But they give crypto firms something they’ve never had: a single federal license to operate custody nationally, without the state-by-state patchwork.
The exception to the trust-only pattern is worth flagging. Erebor Bank, backed by Palmer Luckey, Joe Lonsdale, Peter Thiel’s Founders Fund, and Haun Ventures, launched as the first full-service crypto bank with FDIC insurance and $635 million in venture backing. It plans to offer lending against crypto collateral and finance AI chip purchases alongside traditional banking products. That’s a different animal entirely.
Meanwhile, Coinbase’s charter application is still under review. Given its 80%+ share of U.S. Bitcoin and Ethereum ETF custody, approval would be the biggest domino yet. Nubank already received conditional OCC approval on January 29, signaling that the federal charter is attracting major international players too.
Why it matters for banks: The OCC approved more de novo charter applications in 2025 than in the prior four years combined. A parallel banking system is being built in plain sight. Traditional banks that view crypto custody as someone else’s business are watching their future competitors get licensed.
Sources: CoinDesk | Banking Dive
The Fed Buries “Reputation Risk” (and Choke Point 2.0 With It)
On February 23, the Federal Reserve opened a 60-day comment period to permanently remove “reputation risk” from bank supervision. Vice Chair Bowman called it a “vague and inherently subjective standard” that diverted focus from measurable financial risks. The practical effect: bank examiners can no longer penalize institutions for serving lawful businesses, including crypto firms, based on reputational concerns.
This codifies what the Fed already signaled informally last July. But putting it into rule text matters. During the Choke Point 2.0 era, crypto firms like Anchorage Digital lost corporate accounts, Marathon Digital had $70M frozen days after opening, and CEOs of Uniswap, Ripple, and Gemini had personal accounts shuttered. The FDIC also just settled a FOIA lawsuit (brought at Coinbase’s direction) after a court found it had unlawfully withheld dozens of crypto “pause letters.”
Why it matters for banks: Reputation risk has been used as a blunt instrument across industries, from cannabis to firearms to payday lending. Its removal means banks can make client decisions based on credit, compliance, and financial risk alone. For banks considering Bitcoin custody or stablecoin services, the supervisory cover story for saying “no” just disappeared.
Sources: CoinDesk | Yahoo Finance
JPMorgan Says Bitcoin Might Be the Better Bet Over Gold
In a February 5 research note, JPMorgan analysts led by Nikolaos Panigirtzoglou made a case that would have been unthinkable from the bank a few years ago: Bitcoin has become more attractive than gold on a volatility-adjusted basis.
The argument hinges on a metric most people aren’t watching. The bitcoin-to-gold volatility ratio has fallen to roughly 1.5, a record low. Gold surged 60% in 2025 but with significantly higher price swings than usual, including several double-digit plunges and rebounds. Bitcoin, despite its own brutal drawdown from its October high of ~$126,000 to the mid-$60,000s, has actually been less volatile than gold by comparison.
Using that framework, JPMorgan’s analysts set a long-term theoretical Bitcoin target of $266,000, the price at which Bitcoin’s market cap would match private-sector gold investment (roughly $8 trillion, excluding central bank holdings). They call it “unrealistic” near-term but achievable over time.
Bitcoin is trading around $67,500 today, down roughly 47% from that October peak. ETF flows have turned sharply negative, with $4.5 billion in outflows from spot Bitcoin ETFs in the first eight weeks of 2026. JPMorgan’s estimated production cost has also dropped, from ~$90,000 at the start of the year to $77,000 as of mid-February, after unprofitable miners began shutting down rigs and hashrate fell sharply.
Why it matters for banks: The narrative is shifting underneath the price action. When JPMorgan (whose CEO once called Bitcoin a fraud) publishes research framing it as a superior long-term store of value versus gold, it gives institutional allocators permission to revisit their assumptions. Banks advising wealth clients need to be conversant in this framework, not dismissive of it.
What to Watch
The stablecoin rewards deadline. If the White House brokers a compromise by month’s end, the Clarity Act moves to Senate Banking Committee markup with momentum. If it stalls, expect months of partisan gridlock heading into midterms. Either way, the window for banks to shape this legislation is closing fast.
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