Limited stablecoin rewards are favored by the White House, and if bankers approve, they will be included in the next version of the crypto market structure bill, according to two people familiar with the negotiations.
During a work session Thursday aimed at securing common ground on stablecoin rewards between banks and the crypto industry, the White House made it clear that some rewards programs were going to remain in the next crypto market structure bill, the sources said. Representatives of Wall Street banks who attended the meeting have been actively working on the text, and the White House will prepare an updated draft to circulate among them, they said.
This section of the US Senate’s Digital Asset Market Clarity Act – the crypto industry’s main policy focus in Washington – is one of the key loopholes in the legislation that would govern the operations of US crypto markets. It turns out that the stablecoin section (404 of the bill) has nothing directly to do with market structure, and the revisions being discussed would actually amend an earlier crypto effort that became law last year, the Guiding and Establishing National Innovation for American Stablecoins (GENIUS) Act.
This was the third White House meeting between bankers and crypto insiders, and after bankers moved to allow stablecoin rewards last time, White House negotiators came to the table with a position that some rewards should be allowed for certain activities and transactions, but not for stablecoin holdings that more closely resemble custodial accounts. The White House team – led by Patrick Witt, President Donald Trump’s crypto adviser – called for a quick resolution on the issue that would allow the legislation to move forward, the sources said.
This reflects the fear expressed by bankers: that stable rewards undermine their core business model, which depends on interest-bearing deposits from customers.
Meeting participants privately expressed hope that the compromise they were waiting for was potentially very close. White House spokespeople 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,” Summer Mersinger, CEO of the Blockchain Association, who was among those at the table, said in a statement after the meeting.
If banks refuse to shake hands on limited rewards, the status quo is the GENIUS Act, which gives crypto platforms a much freer hand when it comes to rewards programs than this proposal would. If they instead accepted this approach, their agreement would be likely to convince reluctant senators to return to their support.
However, this is just one of many gaps in the Clarity Act that must be addressed through negotiated terms. The crypto industry also remains heavily involved in Democratic lawmakers’ demands that the bill strengthen protections against bad actors in crypto, particularly in the area of decentralized finance (DeFi).
In addition, Democratic negotiators stressed a few other points that could put them at odds with the White House. They demanded a ban on high-ranking government officials from direct involvement in the crypto industry – a stance that most directly targets President Donald Trump. They also asked the White House to appoint a full slate of committees to the Commodity Futures Trading Commission and the Securities and Exchange Commission, including their Democratic vacancies.
None of the Democrats’ major problems have yet been resolved. If the Senate Banking Committee holds a hearing to advance the bill, as the Senate Agriculture Committee did, the outcome could once again be partisan if the parties do not find answers to these points. That won’t stop the bill from moving to the next step, but it won’t be able to gain approval from the full Senate without significant Democratic support.
Read more: Latest White House talks on stablecoin yield make ‘progress’ with banks, no deal yet
