By Joe Light

Crypto firms are running out of time for President Donald Trump and Congress to sign off on long-awaited legislation defining how the industry will be regulated. The outcome could have big implications for trading platforms like Coinbase Global and for the direction of token prices in coming months.

On Thursday, groups representing crypto firms and banks are expected to meet with the White House in an attempt to resolve the latest roadblock. The problem is that some senators and banks want to ensure that any bill prohibits companies from paying yield to customers for holding stablecoins on their platforms.

The provision is important to Coinbase, which co-created the largest U.S.-based stablecoin, a type of token that is pegged to the dollar. Some banks and lawmakers say offering the yields could cause customers to pull out deposits and move the money into the tokens.

The conflict dominated discussions at a crypto conference held on Wednesday at Trump's Mar-a-Lago resort. The conference was hosted by World Liberty Financial, the digital-assets firm co-founded by Trump, his sons Eric and Don Jr., and others including Zach Witkoff, the son of Steve Witkoff, the White House special envoy to the Middle East.

World Liberty offers its own stablecoin, called USD1, which has grown to have a market capitalization of more than $5 billion since its launch last year. USDC, which Coinbase helped create, has a market value of more than $73 billion.

The conference came amid a crisis of confidence in the crypto market. Bitcoin has nearly halved from last year's all-time high to about $67,000 as of Thursday. Bitcoin has faltered even as the S&P 500 has hit record highs. Gold, which some crypto proponents thought Bitcoin could replace, is 68% higher than its year-ago level.

As crypto prices have slid, speculation on the currencies has diminished as well, cutting into fee income for trading platforms, some firms have increasingly turned to stablecoins as a source of revenue. A law signed by Trump last summer requires the coins to be backed by reserves that include Treasuries and bank deposits. Stablecoin issuers earn yield on the reserves backing the tokens.

Coinbase in its earnings report last week said 20% of its revenue in the fourth quarter -- or $364 million -- came from stablecoins. Less than 10% came from stablecoins in the fourth quarter of 2024.

That has heightened the stakes for the battle playing out in Congress. Coinbase pays a yield of 3.5% on USDC holdings, comparable to that of government money-market funds and higher than most savings accounts. Once an investor owns a stablecoin, he or she is also one step closer to buying other cryptocurrencies like Bitcoin, which are typically bought with stablecoins.

As late as last month, lawmakers seemed poised to move forward with the bill, which would take most crypto tokens out of the purview of the Securities and Exchange Commission. That has long been an industry goal after the SEC under President Joe Biden sued most major platforms for allegedly violating securities laws. A similar bill passed the House with widespread bipartisan support last year.

However, the Senate's version of the bill ran aground after lawmakers planned to include the yield ban. Coinbase withdrew its support, and a Senate committee delayed a vote on the bill hours later.

Most banks are treating stablecoins "as an opportunity, and there's still a handful of folks that are treating it as a threat and trying to be the entrenched incumbent and curtail their competition. We have very little tolerance for that," said Coinbase CEO Brian Armstrong at the conference.

Now, there is a high risk that lawmakers might not manage to approve the legislation before the November midterm elections. Passing a bill is expected to get only harder if Democrats retake the House in November.

Sen. Bernie Moreno (R., Ohio), one of the industry's biggest proponents at the Mar-a-Lago conference, said he hoped lawmakers could come to an agreement by April but warned that they were running out of time. He implored the executives in attendance to draw on "any political connections you have, especially on my Democratic colleagues, over the next 90 days."

Earlier talks between the White House, banks, and crypto firms failed to bring a compromise. An initial proposal by banking trade groups sought to ban not just offering yield for holding stablecoins but rewards for using them, with limited exemptions. There is hope among some crypto lobbyists that lawmakers will at least accept rewards for using the coins, drawing a parallel to credit card rewards.

There are more land mines even if crypto firms reach a compromise on the yield issue. Some Democratic senators say any bill needs to include a ban on Trump and his family profiting from crypto dealings while in office. Entities affiliated with Trump and his family through a holding company own about 38% of World Liberty, according to its website.

Earlier this year after a Wall Street Journal report, World Liberty acknowledged that an Abu Dhabi royal had bought nearly half of the company days before the inauguration, which Democrats have pointed to as a conflict of interest and national security threat.

At the Mar-a-Lago conference, Eric and Don Jr. told attendees that their creation of World Liberty happened in part out of necessity, after their companies were denied basic banking services. The White House has said Trump has no involvement with his companies while in office and denied there are conflicts of interest.

Write to Joe Light at joe.light@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 19, 2026 10:06 ET (15:06 GMT)

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