The current impasse over stablecoin yields in the U.S. Senate Cryptocurrency Market Structure Bill has now taken shape, with crypto parties insisting that stablecoin users receive some form of reward.
A White House meeting between Wall Street bankers and cryptocurrency executives stalled this week, even as officials in President Donald Trump’s administration urged both sides to find a compromise. The banks insist that any stablecoin yields or rewards are unacceptable, arguing that such yields threaten deposit activity at the heart of the U.S. banking system, explaining their position in a one-page document titled “Yield and Interest Prohibition Principles.”
The Digital Chamber has now developed its own set of principles, which it began distributing on Friday, defending the need for a section of the Senate Banking Committee draft bill that outlines a range of circumstances under which incentives could be accepted. The latest document obtained by CoinDesk also says bankers’ request for a two-year study on the impact of stablecoins on deposits is acceptable as long as regulatory rules are not automatically created in response.
“We want to let policymakers know that we do think this is a compromise,” Digital Chamber CEO Cody Carbone said in an interview on Friday. With the document, the industry group said in writing that it is willing to abandon any appearance of paying interest on static holdings of stablecoins, much like a bank savings account.
While the cryptocurrency industry has been pursuing stablecoin products allowed under last year’s Stablecoin Guidance and Establishing National Innovation in the United States (GENIUS) Act, bankers are seeking to overturn the law through changes in the pending Digital Asset Market Clarity Act. But the GENIUS Act represents existing law, so Carbone said the industry’s willingness to abandon stablecoin holding rewards is a significant concession, and cryptocurrency companies should still be able to offer rewards when customers engage in trading and other activities. He said bankers should come back to the negotiating table again.
“If they don’t negotiate, the status quo is the reward is to continue as is,” said Carbone, who said his group’s broad membership — which includes bank members — could bring it closer to the middle of the discussion. “If they do nothing and continue to say, ‘We just want a blanket ban,’ then that will make no sense.”
He hopes the Digital Chamber’s new position paper will restart negotiations, which have been stalled since a banking panel hearing on the bill a month ago was interrupted by disagreements at the 11th hour.
“Hopefully we can be a voice or a middleman that drives this conversation again because we are an industry that represents both sides,” Carbone said.
The Chamber of Digital Commerce’s principles on Friday highlighted two specific reward schemes it wants to protect – those related to providing liquidity and those that promote ecosystem participation. The organization believes that these two provisions of Section 404 of the draft bill are particularly important for decentralized finance (DeFi).
The White House is said to have called for a compromise by the end of the month. The banks have appeared to be holding back in multiple meetings so far, although Trump cryptocurrency adviser Patrick Witt said in an interview with Yahoo Finance on Friday that another meeting could be scheduled for next week.
“We are working hard to resolve the issues raised,” Witt told Yahoo Finance, adding that he encouraged both sides to compromise on the details.
“Unfortunately, this has become such a big problem,” he said, because the Clarification Act is not actually about stablecoins, which are better suited to the business of the Genius Act that was already passed. “Let’s bring a scalpel to the narrow issue of idle yields,” he added.
The Senate Agriculture Committee has passed its own version of the CLARIFICATION Act, which focuses on the commodities side of the ledger, while the Senate Banking Committee’s version is more concerned with securities. If the Banking Committee follows the Agriculture Committee’s lead, it will advance the bill along party lines. But if the final bill is ultimately approved by the full Senate, it will require significant Democratic support to clear the chamber’s 60-vote advantage.