The White House favors limited rewards for stablecoins, and if bankers approve them, they will be in the next draft of the crypto market structure bill, according to two people familiar with the negotiation.
In a Thursday work session aimed at ensuring common ground on stablecoin rewards between banks and the cryptocurrency industry, the White House made clear that certain rewards programs would remain in the next draft of the cryptocurrency market structure bill, the people said. Representatives of Wall Street banks who attended the meeting were actively working on that language, and the White House will produce an updated draft to circulate among them, they said.
This section of the US Senate’s Digital Asset Market Clarity Act, the cryptocurrency industry’s main policy target in Washington, is one of the main flaws in the legislation that would govern the operations of US cryptocurrency markets. As it happens, the stablecoin section (404 of the bill) has nothing directly to do with market structure, and the revisions being discussed would actually overhaul a previous crypto effort that became law last year, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
This was the third White House meeting between bankers and crypto experts, and after bankers stuck to allowing 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 are more like deposit accounts. The White House team, led by President Donald Trump’s crypto adviser Patrick Witt, urged a quick resolution on this point that would allow the legislation to move forward, the people said.
That reflects the fear expressed by bankers: that stablecoin rewards will undermine their basic business model that relies on customers making interest-bearing deposits.
Participants in the meeting privately expressed hope that the compromise they were hoping for is 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 toward resolving outstanding issues related to rewards and maintaining market structure legislation,” Blockchain Association CEO Summer Mersinger, who has been among the participants at the table, said in a statement after the meeting.
If banks refuse to shake hands with limited rewards, the status quo is the GENIUS Act, which gives crypto platforms a much freer hand with rewards programs than this proposal. If they instead approve this approach, their agreement would likely bring reluctant senators back to support it.
However, this is just one of several holes in the Clarity Law that must be filled with negotiated language. The cryptocurrency industry also remains heavily involved in calls from Democratic lawmakers that the bill increase protections against bad actors in cryptocurrencies, especially in the decentralized finance (DeFi) space.
In addition, Democratic negotiators have insisted on a couple more points that could put them at odds with the White House. They have demanded that top government officials be banned from directly involving themselves in the crypto industry, a position most directly aimed at President Donald Trump. They have also asked the White House to appoint a full slate of committees on the Commodity Futures Trading Commission and the Securities and Exchange Commission, including their Democratic vacancies.
None of the Democrats’ major problems have been resolved yet. If the Senate Banking Committee moves forward with a hearing to promote the bill, as the Senate Agriculture Committee did, the outcome could once again become partisan if the parties do not find answers to those points. That won’t stop the legislation from moving to the next step, but it can’t win approval in the Senate at large without significant Democratic support.
Read more: Latest White House talks on stablecoin performance make ‘progress’ with banks, no deal yet
