Nikolas Sargeant
A White House-brokered meeting between cryptocurrency and banking representatives to reach agreement on stablecoin provisions in market structure legislation has been characterized as "productive" but remains unresolved as fundamental disagreements over yield payments persist.
"Productive session at the White House today, compromise is in the air," Ripple legal chief Stuart Alderoty, one of the meeting's attendees, posted to X on Tuesday. "Clear, bipartisan momentum remains behind sensible crypto market structure legislation. We should move now, while the window is still open," he added.
Congress is attempting to pass legislation defining how US market regulators police cryptocurrency markets. The House passed a similar bill, the CLARITY Act, in July, but the effort has stalled as the Senate Banking Committee has yet to secure sufficient bipartisan support to advance the legislation.
Momentum to advance the bill was lost when major cryptocurrency lobbyist Coinbase withdrew its support last month over provisions prohibiting all yield payments tied to stablecoins. Banking lobbyists have argued that yield payments to stablecoin holders on third-party platforms such as exchanges pose risks to bank deposits and could undermine the banking system.
Tuesday's meeting was the second in two weeks bringing banks and the cryptocurrency industry to the White House. The first on February 2 was described by White House crypto adviser Patrick Witt as "constructive" and "fact-based," suggesting gradual progress despite persistent disagreements.
Dan Spuller, industry affairs lead at crypto advocacy group the Blockchain Association, posted to X that the latest meeting "was a smaller, more focused session" with "serious problem-solving." He stated: "Stablecoin rewards were front and center. Banks did not come to negotiate from the bill text, instead arriving with broad prohibitive principles, which remains a key disagreement."
A handout distributed at the meeting by banking groups reportedly listed "yield and interest prohibition principles" that should be included in the Senate's crypto bill, reiterating the banking sector's push to ban all stablecoin yield payments. The position represents banking industry concerns about competition for deposit funding.
Three major banking groups, the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America, stated in a joint statement that "ongoing discussions" were necessary to advance the legislation. They added that a "framework can and must embrace financial innovation without undermining safety and soundness, and without putting the bank deposits that fuel local lending and drive economic activity at risk."
Meanwhile, BitGo CEO Mike Belshe argued that both cryptocurrency and banking representatives "should stop re-litigating" the GENIUS Act, which banned stablecoin issuers from paying yield directly, to advance the market structure bill. "That battle was fought. If you don't like GENIUS, amend it," he stated. "Market structure has nothing to do with yield on stablecoins and must not be delayed further."
The meetings reflect ongoing tension between cryptocurrency platforms seeking to offer competitive yields on stablecoin holdings and traditional banks concerned about deposit flight to higher-yielding digital alternatives. The dispute has become a central obstacle to advancing comprehensive cryptocurrency regulation.
