A meeting hosted by the White House on Thursday had cryptocurrency insiders and bankers once again discussing U.S. digital asset legislation, and while more progress was made, a compromise agreement has yet to be reached, according to a post by participant, Coinbase Chief Legal Officer Paul Grewal, on the social media site X.
“The dialogue was constructive and the tone cooperative,” Grewal wrote, saying the two sides had made “more progress.”
This is the third in a series of meetings aimed at breaking the impasse on the Cryptocurrency Market Structure Bill on issues unrelated to market structure. The U.S. banking industry expressed strong opposition to the way a previous legislative effort, now enacted into law, the Stablecoin National Innovation Guidance and Establishment in the United States (GENIUS) Act would have allowed cryptocurrency companies to offer stablecoin rewards. Bankers believe such incentives threaten the depository business at the heart of their industry, and they are asking the Digital Asset Market Clarity Act to reaffirm this in the Genius Act.
At the latest meeting, bankers arrived with a principles document banning compromise discussions, and Thursday’s meeting went well beyond the scheduled two hours, according to people familiar with the negotiations. White House officials pressured participants to stay until they found common ground, including by confiscating their cellphones, people familiar with the matter said.
The question of whether stablecoins should be able to provide yields, such as those offered to customers on platforms like Coinbase, is one of the major remaining sticking points in legislation governing the U.S. cryptocurrency market. Early compromise efforts sought to abandon rewards for static stablecoin holdings and instead retain rewards only for certain activities and transactions conducted using the asset. But the bank insisted that all incentives be banned.
If industries agree on this point, it still won’t seal victory in Congress. The Senate Banking Committee would need to 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 require input from many Democrats, and that hasn’t happened yet.
Democratic negotiators insisted on several key points, such as barring senior government officials from engaging in significant business interests in the cryptocurrency space — a concern aimed squarely at President Donald Trump. They also called on the White House to fill commissions at the Commodity Futures Trading Commission and Securities and Exchange Commission, including with Democratic nominations to fill vacancies. In addition, members also called for strengthening the control of illegal financial risks, especially in the field of decentralized finance (DeFi).
The proposals from Republicans and the White House do not yet meet all of their demands, and so far they have satisfied Democrats.
The Clarification Act is a top policy priority for the cryptocurrency industry. Once U.S. regulations become permanent, the industry is expected to see a surge in activity and investment as it becomes an indelible part of the U.S. financial system.
Read more: Brian Armstrong says banking trade groups share responsibility for market structure bill deadlock