The current stalemate over stablecoin dividends in the US Senate’s crypto market structure bill is now in writing, and the crypto side is adamant about needing some form of rewards for stablecoin users.
A White House meeting between Wall Street bankers and crypto executives hit a wall this week, despite officials in President Donald Trump’s administration urging the sides to find a compromise. The banks maintained that no stablecoin dividend or reward is acceptable, arguing that such dividends threaten depository activity at the heart of the US banking system, explaining their position in a one-page paper titled “Yield and Interest Prohibition Principles.”
The digital chamber has now written its own set of principles and began circulating it on Friday, defending the need for the section in the Senate Banking Committee’s draft bill outlining a range of situations where rewards could be acceptable. The latest document, obtained by CoinDesk, also says the banks’ request for a two-year study of stablecoins’ effect on deposits is acceptable as long as it doesn’t come with an automatic regulatory provision in response.
“We want to make the case known to politicians that we believe this is a compromise,” Digital Chamber CEO Cody Carbone said in an interview Friday. With this document, the industry group writes that it is willing to forgo anything resembling an interest payment for static holdings of stablecoins, which most closely resemble a bank savings account.
While the crypto sector has pursued stablecoin products allowed under last year’s Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, bankers are trying to dial back that law with changes included in this pending Digital Asset Market Clarity Act. But the GENIUS Act represents the current law of the land, so Carbone suggested that his industry’s willingness to scrap rewards on stablecoin holdings is a significant concession, and the crypto companies should still be able to offer rewards when customers engage in transactions and other activity. Bankers should return to the table to talk again, he said.
“If they don’t negotiate, then the status quo is that just rewards continue as they are,” said Carbone, who suggested that his group’s broad membership — which includes bank members — may bring it closer to the center of the discussion. “If they don’t do anything and they keep saying, ‘We just want a blanket ban,’ then it’s not going anywhere.”
He hopes the Digital Chamber’s new position paper can reset the negotiations that have stalled progress on the legislation since an 11th-hour disagreement derailed a banking panel hearing on the bill a month ago.
“Hopefully we can be the voice or the middleman that helps drive that conversation again because we’re the one trade that represents both sides,” Carbone said.
The digital chamber’s principles on Friday highlighted two particular reward scenarios it wanted protected – those tied to providing liquidity and those that promote ecosystem participation. The group argued that these two provisions of the bill’s Section 404 are particularly important in decentralized finance (DeFi).
The White House is said to have called for a compromise by the end of this month. So far, the banking side has not appeared to budge from repeated meetings, although Trump’s crypto adviser Patrick Witt said in a Friday interview with Yahoo Finance that another gathering may be scheduled for next week.
“We are working hard to resolve the issues that were raised,” Witt told Yahoo Finance, saying he encouraged both sides to work out the details.
“It’s unfortunate that this has become such a big issue,” he said, because the Clarity Act isn’t really about stablecoins, which was more appropriately the case for the already passed GENIUS Act. “Let’s use a scalpel here to resolve this narrow question of idle yield,” he added.
The Senate Agriculture Committee has already passed its own version of the Clarity Act, which focused on the commodities side of the ledger, while the Senate Banking Committee’s version is more about securities. If the banking panel follows its agriculture counterparts, it will advance the bill along partisan lines. But if a final bill is to eventually pass the full Senate, it will need a lot of Democratic support to clear the chamber’s 60-vote margin.
