Crypto industry negotiators arrived at the White House on Tuesday ready to talk about a legislative deal on stablecoin dividends, but their banking counterparts were not yet ready to compromise on the Senate’s crypto market structure bill, according to a person familiar with the negotiations.
The fight over whether stablecoins should be able to offer rewards — a lobbying battle between Wall Street bankers and crypto insiders — is one of the main headwinds preventing the Senate Banking Committee from advancing the Digital Asset Market Clarity Act. It’s now been an issue for months, and the banking side held on to ban the reward activity and more, the person said, despite the White House’s insistence last week that both sides come up with ideas to compromise.
The crypto team at the table is said to include executives from Coinbase, Ripple, a16z, the Crypto Council for Innovation and the Blockchain Association, according to people familiar with the plans. The White House sought to downplay the number of attendees at the latest gathering there last week, which had not produced significant progress on the issue of stablecoin reward programs, a key component of crypto platforms’ business models.
Despite the lack of major progress, crypto representatives struck a hopeful note in statements about the meeting.
“We are encouraged by the progress being made as stakeholders remain constructively engaged in addressing outstanding issues,” said Blockchain Association CEO Summer Mersinger, who is said to be attending the meeting.
“The important work continues,” Ji Kim, CEO of CCI, said in a statement after the meeting, saying his group “appreciates the banking industry for their continued commitment.”
Banking groups involved in the meeting, including the Bank Policy Institute and the American Bankers Association, issued a statement after the meeting, though it did not detail the next steps in the legislation.
“As we noted during the meeting, this framework can and must embrace financial innovation without undermining safety and soundness and without jeopardizing the bank deposits that drive local lending and drive economic activity,” the group said in the combined statement.
Before the Senate can approve a bill, the banking panel must approve it through a majority vote. The legislation already has the necessary support from the Senate Agriculture Committee, and a similar bill of the same name won a vote in the House of Representatives last year. But bankers have raised concerns about stablecoin dividends and rewards threatening the deposit business at the core of their industry.
However, the stablecoin yield was not the only major problem. Senate Democratic negotiators have demanded that the effort include a ban on deep crypto involvement by senior officials, primarily driven by President Donald Trump’s personal crypto interests. The Democratic lawmakers have also insisted on greater protections against crypto’s use in illicit financing, and also that the Commodity Futures Trading Commission be fully staffed by commissioners — including Democratic appointees — before it can begin crypto regulations.
While Trump’s crypto adviser, Patrick Witt, has predicted that the negotiators will soon find common ground, he also told CoinDesk that the White House will not support efforts aimed at the president. Witt is said to lead the meeting on Tuesday, just as he did last week.
The Clarity Act faces a number of practical challenges in addition to the political disputes, including the Senate’s ongoing friction over one last remaining budget issue: the funding of the Department of Homeland Security, which runs Immigration and Customs Enforcement (ICE). The Senate is always a difficult place to secure the necessary floor time to move legislation, and the closer the chamber gets to the long recesses before the midterm elections this year, the harder it will be to find enough time to deal with a major crypto bill.
Read more: Crypto industry, banks not yet close to stablecoin dividend deal at White House meeting
UPDATE (February 10, 2025, 23:16 UTC): Adds comment from the bank’s lobby groups.
