White House Unveils Draft Stablecoin Law Banning Idle Balance Yield, Granting SEC and Treasury Enforcement Powers

The White House held a stablecoin policy meeting with representatives from Coinbase, Ripple, a16z, and major crypto trade groups, while banks were represented by national banking associations rather than individual institutions. White House Crypto Council Executive Director presented draft legislative text that would ban earning yield on idle stablecoin balances and savings-style models, with enforcement authority granted to the SEC, Treasury, and CFTC, imposing civil penalties of up to $500,000 per violation per day. The draft indicates rewards may only be offered when tied to defined activities such as lending or structured use cases, while bank trade groups continue to push for a formal study on whether payment stablecoins could reduce traditional bank deposits. Sources say talks are expected to continue in the coming days, with an end-of-month agreement considered realistic, and despite yield restrictions, many in the industry view the framework's clarification of custody rules, exchange oversight, token classification, and agency roles as positive for reducing regulatory uncertainty.