Limited stablecoin rewards are favored by the White House, and if bankers opt out, they will be included in the next draft of the crypto market structure bill, according to two people familiar with the negotiations.
In a Thursday work session aimed at securing common ground on stablecoin rewards between banks and the crypto industry, the White House made clear that certain rewards programs would remain in the next draft of the crypto market structure bill, the people said. Representatives of Wall Street banks who attended the meeting were actively working on that language, and the White House will put together an updated draft to circulate among them, they said.
This part of the US Senate’s Digital Asset Market Clarity Act – the crypto industry’s main policy target in Washington – is one of the biggest fault lines for the legislation that will govern the operations of US crypto markets. As it happens, the stablecoin section (404 of the bill) has nothing directly to do with market structure, and the revisions being discussed would actually revise an earlier crypto effort that became law last year, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
This was the third White House meeting between bankers and crypto insiders, and after the bankers dug in their heels on allowing stablecoin rewards last time, White House negotiators arrived at the table with a position that some rewards should be allowed for certain activities and transactions, but not for holdings of stablecoins similar to deposit accounts. The White House team — led by President Donald Trump’s crypto adviser, Patrick Witt — called for a quick decision on that point that allows the legislation to move forward, the people said.
It reflects the fear bankers have expressed: that stablecoin rewards would undermine their bread-and-butter business model that depends on customers making interest-bearing deposits.
Participants in the meeting privately expressed hope that the compromise they have been waiting for is potentially very close. White House spokesmen did not immediately respond to a request for comment.
“Today’s meeting at the White House was a constructive step forward in resolving outstanding issues related to rewards and keeping market structure legislation on track,” Blockchain Association CEO Summer Mersinger, who was among those at the table, said in a statement after the meeting.
If the banks refuse to shake hands on limited rewards, the status quo is the GENIUS Act, which gives crypto platforms a much freer hand with rewards programs than this proposal would. If they instead give that approach the nod, their deal is likely to win reluctant senators back to support.
However, this is just one of several gaps in the Clarity Act that must be filled with negotiated language. The crypto industry also remains heavily involved in requests from Democratic lawmakers for the bill to increase protections against bad actors in crypto, particularly in the decentralized finance (DeFi) space.
Democratic negotiators have also insisted on a few other points that could put them at odds with the White House. They have called for a ban on senior government officials being directly involved in the crypto industry — a position aimed most directly at President Donald Trump. They have also called on the White House to name a full list of commissioners at the Commodity Futures Trading Commission and the Securities and Exchange Commission, including their Democratic vacancies.
None of the Democrats’ big questions have yet been resolved. If the Senate Banking Committee goes ahead with a hearing to advance the bill, as the Senate Agriculture Committee did, the result could again be partisan if the parties do not find answers to these points. That won’t prevent the legislation from progressing through the next step, but it can’t win approval from the full Senate without significant Democratic support.
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