Limited stablecoin rewards are favored by the White House and will be included in the next draft of a cryptocurrency market structure bill if bankers sign it, according to two people familiar with the matter.
During a working session on Thursday aimed at ensuring consensus between banks and the crypto industry on stablecoin rewards, the White House made it clear that certain reward programs will remain in the next draft of the crypto market structure bill, people familiar with the matter said. Representatives of Wall Street banks present at the meeting were actively working on the language, and the White House would put together an updated draft to circulate among them, they said.
This section of the U.S. Senate’s Digital Asset Market Clarity Act — a top policy goal for the crypto industry in Washington — is one of the major flaws in the legislation governing U.S. crypto market operations. In fact, the stablecoin section (Section 404 of the draft bill) is not directly related to market structure, and the revisions being discussed would actually overhaul an earlier cryptocurrency effort that became law last year, the Stablecoin Guidance and Establishing National Innovation in the United States (GENIUS) Act.
This is the third White House meeting between bankers and crypto insiders, and after bankers last insisted that stablecoin rewards be allowed, White House negotiators arrived at the negotiating table with the position that some rewards must be offered for certain activities and transactions, but not for holding stablecoins that are more akin to deposit accounts. A White House team led by President Donald Trump’s cryptocurrency adviser Patrick Vitter is urging a quick resolution on the issue so the legislation can move forward, people familiar with the matter said.
This reflects concerns expressed by bankers that stablecoin rewards will undermine their basic business models that rely on customers to make interest-earning deposits.
Meeting participants privately expressed hope that the compromise they awaited might be close. A White House spokesman did not immediately respond to a request for comment.
“Today’s meeting at the White House is a constructive step forward in resolving outstanding issues related to rewards and keeping market structure legislation on track,” Summer Mersinger, CEO of the Blockchain Association, who attended the meeting, said in a statement after the meeting.
If banks refuse to accept limited rewards, the status quo is the Genius Act, which would give cryptocurrency platforms more freedom in their reward programs than this proposal. If they agree to this approach, their deal could regain support among reluctant senators.
However, this is just one of several holes in the Clarification Act that need to be filled through negotiated language. The crypto industry also remains responsive to calls from Democratic lawmakers for a bill that strengthens protections for bad actors in the crypto space, particularly in the decentralized finance (DeFi) space.
In addition, Democratic negotiators also insisted on other points that may cause them to disagree with the White House. They are demanding that senior government officials be barred from direct involvement in the cryptocurrency industry — a stance that most directly targets President Donald Trump. They also called on the White House to release the full list of committees at the Commodity Futures Trading Commission and Securities and Exchange Commission, including Democratic vacancies.
All of the Democratic Party’s big issues have yet to be resolved. If the Senate Banking Committee continues to hold hearings to advance the bill, as the Senate Agriculture Committee did, the outcome could become partisan again if the parties can’t find answers to these questions. That won’t stop the legislation from moving forward, but it won’t win approval from the full Senate without strong Democratic support.
Read More: Latest White House Negotiations on Stablecoin Yields Make ‘Progress’ with Banks, But No Deal Yet