White House Pushes Crypto and Banks Toward Stablecoin Compromise

The White House has set a deadline for crypto firms and Wall Street banks to settle their fight over stablecoin yields, making a compromise on bill language a condition for moving US crypto market structure legislation forward in the Senate.

At a two-hour meeting Monday in the Diplomatic Reception Room, crypto executives from firms including Coinbase, Circle, Ripple, Crypto.com and the Crypto Council for Innovation outnumbered banking lobbyists.

The discussion, led by President Donald Trump’s crypto adviser Patrick Witt, focused on whether stablecoins should be allowed to pay yield or rewards and how those products would fit alongside traditional deposits.

Related: Visa, Mastercard Play Down Stablecoins for Payments as Consumer Demand Falls Short

Advancing Negotiations

Talks will now continue with a smaller drafting group asked to bring specific text changes back to the administration. 

Bank representatives from trade bodies such as the American Bankers Association and the Financial Services Forum said they are prepared to keep negotiating but must ensure any deal protects deposit-funded lending and the stability of the banking system.

Crypto industry advocates called the session a necessary step. Cody Carbone of the Digital Chamber said the meeting helped clear one of the main obstacles to further market structure progress. 

We look forward to continuing this kind of work to ensure market structure rules of the road will become law (…) Inaction is not an option, and we are committed to rolling up our sleeves and doing the hard work to ensure legislative progress does not punish innovators or consumers who see digital assets as a foundation for their financial future.

Cody Carbone, CEO of The Digital Chamber.

The policy fight also involves the fact that Democrats are seeking anti-corruption measures targeting Trump-linked crypto ventures, a requirement that the Commodity Futures Trading Commission be fully staffed with commissioners from both parties, and tougher safeguards against money laundering and sanctions evasion.

The meeting took place during a partial federal government shutdown, triggered by Congress’ failure to pass a funding bill. In any case, the administration is backing a plan to reopen the government while leaving Department of Homeland Security appropriations for separate debate. 

Notably, Trump has urged lawmakers to approve the funding measure without amendments, as the delay narrows the window for the crypto legislation to reach a full Senate vote this year.