The current impasse over stablecoin yields in the US Senate’s Crypto Market Structure bill is now in writing, and the crypto side is staying the course on the need for some forms of rewards for stablecoin users.
A White House meeting between Wall Street bankers and crypto executives hit a wall this week, despite officials in President Donald Trump’s administration urging the parties to find a compromise. The banks maintained their position that no stable yield or reward is acceptable, arguing that such yields threaten the deposit business at the heart of the U.S. banking system, explaining their position in a one-page document titled “Principles for Prohibiting Yields and Interest.”
The Digital Chamber has now drafted its own set of principles and began circulating them Friday, arguing for the need for a section in the Senate Banking Committee’s bill that outlines a series of situations in which rewards might be acceptable. The latest document, obtained by CoinDesk, also indicates that bankers’ request for a two-year study on the effect of stablecoins on deposits is acceptable, provided it is not accompanied by automatic regulation in response.
“We want to let policymakers know that we think this is a compromise,” Digital Chamber CEO Cody Carbone said in an interview Friday. With this document, the industry group indicates in writing that it is ready to give ground on anything resembling an interest payment for static holdings of stablecoins, the closest thing to a bank savings account.
As the crypto industry searches for stablecoin products authorized under last year’s Guiding and Establishing National Innovation for American Stablecoins (GENIUS) Act, bankers are trying to roll back that law with changes included in this pending Digital Asset Market Clarity Act. But the GENIUS Act represents the current law of the land, so Carbone suggested that his industry’s push to remove rewards on stablecoin holdings is an important concession, and that crypto companies should still be able to offer rewards when customers engage in transactions and other activities. Bankers should come back to the table to talk again, he said.
“If they don’t negotiate, then the status quo is that the awards continue as is,” said Carbone, who suggested that the broad membership of his group — which includes members of the banking industry — could place him closer to the middle of the discussion. “If they do nothing and continue to say, ‘We just want a blanket ban,’ it won’t get anywhere.”
He hopes the new digital House position paper can restart negotiations that have halted progress on the legislation since a last-minute disagreement derailed a hearing on the bill in the banking panel a month ago.
“I hope that we can be the voice or the intermediary that helps lead this conversation once again, because we are the only sector that represents both sides,” Carbone said.
The Digital Chamber’s principles on Friday highlighted two particular reward scenarios it wanted to protect: those related to the provision of liquidity and those promoting participation in the ecosystem. The group argued that these two provisions of Section 404 of the bill are particularly important in the area of decentralized finance (DeFi).
The White House has reportedly called for a compromise by the end of the month. So far, the banks have not appeared to budge in repeated meetings, although Trump’s crypto 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, saying he encouraged both sides to delve into the details.
“It’s unfortunate that this has become such a big issue,” he said, because the Clarity Act doesn’t really address stablecoins, which was more appropriate for the already-passed GENIUS Act. “Let’s use a scalpel here to address this narrow question of unused yield,” he added.
The Senate Agriculture Committee has already passed its own version of the Clarity Act, which focuses on the commodities side of the ledger, while the Senate Banking Committee’s version focuses more on securities. If the banking panel follows its agricultural counterparts, it will advance the bill along partisan lines. But if a final bill must ultimately be approved by the full Senate, it will need big Democratic support to clear the chamber’s 60-vote margin.
