Crypto industry negotiators arrived at the White House on Tuesday ready to discuss a legislative deal on stablecoin yields, but their banking industry counterparts were not yet ready to compromise on the Senate’s crypto market structure bill, according to a person familiar with the negotiations.
The fight over whether stablecoins should be able to offer rewards — a lobbying battle between Wall Street bankers and crypto insiders — is one of the main obstacles preventing the Senate Banking Committee from advancing the Digital Asset Market Clarity Act. It’s now been a sticking point for months, and banks have maintained their stance by banning rewards activities and more, the person said, despite the White House’s insistence last week that both sides come up with compromise ideas.
The crypto team at the table would include executives from Coinbase, Ripple, a16z, the Crypto Council for Innovation and the Blockchain Association, according to people familiar with the plans. The White House sought to reduce the number of participants at last week’s latest gathering, which failed to produce significant progress on the issue of stable rewards programs that are a key part of crypto platforms’ business models.
Despite the lack of major progress, crypto representatives sounded a hopeful note in their statements regarding the meeting.
“We are encouraged by the progress being made as stakeholders remain constructively engaged in resolving outstanding issues,” said Summer Mersinger, CEO of the Blockchain Association, who reportedly attended the meeting.
“The important work continues,” Ji Kim, CEO of CCI, said in a statement after the meeting, saying his group “appreciates the banking industry for its continued commitment.”
Banking groups involved in the meeting, including the Bank Policy Institute and the American Bankers Association, released a statement after the meeting, although it provided no details on the legislation’s next steps.
“As we noted at the meeting, this framework can and should embrace financial innovation without compromising safety and soundness, and without endangering the bank deposits that fuel local lending and drive economic activity,” the group said in the joint statement.
Before the Senate can approve a bill, the banking panel must approve it by a majority vote. The legislation already has needed support from the Senate Agriculture Committee, and a similar bill with the same name won a vote in the House of Representatives last year. But bankers have raised concerns that stable returns and rewards threaten the deposit business, the heart of their sector.
However, the stablecoin’s yield was not the only major sticking point. Senate Democratic negotiators demanded that the effort include a ban on any deep involvement in crypto by top government officials, driven primarily by President Donald Trump’s personal crypto interests. Democratic lawmakers also insisted on greater protection against the use of crypto in illicit financing and also that the Commodity Futures Trading Commission be fully staffed with commissioners — including Democratic appointees — before they could get to work on crypto regulation.
Although Trump crypto advisor Patrick Witt predicted that negotiators would soon find common ground, he also told CoinDesk that the White House would not support an effort targeting the president. Witt is expected to lead Tuesday’s meeting, as he did last week.
The Clarity Act faces a number of practical challenges beyond political conflicts, including continued Senate friction over a final remaining budget issue: funding for the Department of Homeland Security, which manages Immigration and Customs Enforcement (ICE). The Senate is always a difficult place to get the time needed to pass legislation, and the closer the chamber gets to long breaks before this year’s midterm elections, the harder it is to find enough time to deal with a major crypto bill.
Read more: Crypto industry and banks not yet close to agreement on stable coin yield at White House meeting
UPDATE (February 10, 2025, 11:16 p.m. UTC): Adds comment from bank lobby groups.
