Further progress has been made, but no compromise deal has yet been reached after a meeting hosted by the White House on Thursday to once again bring crypto insiders and bankers to the table on U.S. digital asset legislation, according to a post on social media site X by attendee Paul Grewal, Coinbase’s chief legal officer.
“The dialogue was constructive and the tone cooperative,” Grewal wrote, saying the parties had made “more progress.”
It was the third in a series of meetings intended to break the impasse in which the crypto market structure bill is stuck on an issue that has nothing to do with market structure. The U.S. banking industry has criticized how the previous legislative effort that has now become law – the Guiding and Establishing National Innovation for American Stablecoins (GENIUS) Act – allowed crypto companies to offer rewards on stablecoins. Bankers say such rewards threaten the deposit business, which is the core of their industry, and they have demanded that the Digital Assets Market Clarity Act take this point up in the GENIUS Act.
After the last meeting in which bankers arrived with a principles paper that ruled out any discussion of compromise, Thursday’s meeting stretched well beyond the scheduled two hours, people briefed on the negotiations said. White House officials pressured participants to stay until they found common ground, including getting their phones back, the sources said.
Whether stablecoins should be able to offer a return, as in products offered to customers on platforms like Coinbase, is among the major remaining sticking points in the legislation that would govern U.S. crypto markets. An earlier compromise effort aimed to forgo rewards on stablecoin holdings and only retain them for certain activities and transactions carried out with the assets. But the banks stood firm, demanding that all rewards be banned.
If industries reach agreement on this, it still won’t guarantee a victory in Congress. The Senate Banking Committee is scheduled to hold a hearing to consider moving the bill forward, just as the Senate Agriculture Committee did when it voted along partisan lines to approve its own version. But for a bill to pass the Senate, the process will require buy-in from many Democrats, and that hasn’t happened yet.
Democratic negotiators insisted on a few major points, such as prohibiting high-ranking government officials from having significant business interests in crypto — a concern directly addressed to President Donald Trump. They also called on the White House to fill the Commodity Futures Trading Commission and Securities and Exchange Commission committees, including appointing Democratic vacancies. Additionally, members demanded stricter controls on illicit financing risks, particularly in the area of decentralized finance (DeFi).
None of their demands have yet been met by the offers from Republicans and the White House that have so far satisfied Democrats.
The Clarity Act is the crypto industry’s top policy priority. Once U.S. regulations are finalized, the industry expects a surge in activity and investment as it becomes an indelible part of the U.S. financial system.
