More progress was made, but no compromise deal has yet emerged after a meeting organized by the White House on Thursday to bring crypto insiders and bankers back to the table on US digital asset law, according to a post on social media X by attendee Paul Grewal, the chief legal officer at Coinbase.
“The dialogue was constructive and the tone cooperative,” Grewal wrote, saying the parties made “more progress.”
This was the third in a series of meetings to pierce the impasse that has locked the crypto market structure bill on a point that has nothing to do with market structure. The US banking industry put its foot down over the way the previous legislative effort that is now law – the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act – allowed crypto firms to offer rewards on stablecoins. Bankers argue that such rewards threaten the deposit business at the core of their industry, and they have demanded that the Digital Asset Market Clarity Act reinstate this point in the GENIUS Act.
After the latest meeting, in which the bankers arrived with a policy document that shut down talk of compromise, Thursday’s meeting stretched well beyond the two-hour schedule, people briefed on the talks said. White House officials pressured participants to stay until they had found common ground, including collecting their phones, the people said.
The question of whether stablecoins should be able to offer returns, such as in the products offered to customers on platforms such as Coinbase, is among the main remaining points in the legislation that will govern the US crypto markets. A previous compromise attempt tried to abandon rewards on static stablecoin holdings and keep them only on certain activities and transactions made with the assets. But the banks had stuck to a demand that all rewards be banned.
If the industries agree on this point, it still does not lock in a congressional victory. The Senate Banking Committee must hold a hearing to consider advancing the legislation, just as the Senate Agriculture Committee did when it voted along party lines to approve its own version. But to get a bill that can pass the Senate, the process will need a lot of Democrats on board, and that hasn’t happened yet.
Democratic negotiators have insisted on a few key points, such as banning high-ranking officials from significant business interests in crypto — a concern aimed squarely at President Donald Trump. They have also called on the White House to fill the commissions at the Commodity Futures Trading Commission and the Securities and Exchange Commission, including nominations to fill the Democratic vacancies. Members have also called for tighter controls on illicit financing risks, particularly in decentralized finance (DeFi).
None of their requests have yet been met with offers from Republicans and the White House, which has so far satisfied Democrats.
The Clarity Act is the top policy priority for the crypto industry. Once US regulations are set in place permanently, the sector expects to see an increase in activity and investment as it becomes an indelible part of the US financial system.
Read more: Bank trade groups responsible for deadlock on market structure bill, says Brian Armstrong
