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Crypto Leaders and Bank Executives Leave Second White House Meeting Without Stablecoin Yield Deal

Highlights:

  • Lawmakers left the White House without reaching an agreement on stablecoin yield provisions in the crypto bill.
  • Banking groups pushed for a broad ban on stablecoin rewards, citing deposit and liquidity concerns.
  • The Senate Banking Committee still lacks bipartisan backing to advance the market structure legislation.

Crypto leaders and bank executives left the second crypto White House meeting without an agreement on stablecoin yields, according to Eleanor Terrett. Officials described the session as productive, yet negotiators did not reach a compromise. The talks focused on stablecoin provisions tied to the broader market structure bill. Lawmakers still need bipartisan support in the Senate before advancing the legislation.

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Stuart Alderoty said, “Productive session at the White House today — compromise is in the air.” He also said bipartisan momentum remains behind the crypto market structure legislation. The meeting followed an earlier Feb. 2 session at the White House.

Participants in the meeting included Ripple, Coinbase, the Blockchain Association, and the Crypto Council for Innovation. Major banking institutions and trade groups also attended. The session aimed to narrow differences over stablecoin reward language. However, attendees left without an agreed framework.

The bill would clarify how U.S. regulators oversee digital assets. It would define boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The House passed the CLARITY Act in July. The Senate Banking Committee has not gathered enough bipartisan votes to move forward.

Stablecoin Yield Standoff Deepens Between Financial Sectors

Stablecoin yield dominated the latest discussion. Banking representatives circulated a document outlining “yield and interest prohibition principles.” The document called for a broad ban on financial and non-financial benefits linked to payment stablecoins. It also proposed strict enforcement measures and anti-evasion standards.

Banking groups argued that rewards could divert deposits from traditional banks. They warned that deposit shifts could affect lending capacity and liquidity levels. Three major banking associations issued a joint statement during the talks.

They stated:

“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.”

The banks also requested limits on marketing language tied to rewards. They said any exemptions must remain extremely narrow. Their position extends beyond the current Senate draft. The draft language bars rewards for passive stablecoin holdings. However, it allows limited activity-based incentives. Banking representatives said those incentives could blur distinctions between stablecoins and insured deposits.

Crypto representatives pushed back during the meeting. Dan Spuller said, “Banks did not come to negotiate from the bill text, instead arriving with broad prohibitive principles.” He described the session as smaller and more focused than the earlier meeting.

Coinbase withdrew support for the bill last month over reward provisions. The company objected to language that would prohibit yield payments tied to stablecoins. That decision added pressure to ongoing negotiations.

Senate Path Forward Faces Renewed Uncertainty

The next decision now rests with the Senate Banking Committee. Policymakers will have to decide whether to change the reward provisions. Industry representatives pointed out that further negotiations could be done among trade groups. The officials have not announced any additional White House sessions.

Earlier legislation, including the GENIUS Act, prohibited stablecoin issuers from paying yield directly. The current dispute centers on rewards offered through third-party platforms such as exchanges. Some industry leaders have urged lawmakers to move the broader market structure bill forward without reopening the settled provisions. Attendees said trade organizations will likely continue technical discussions. The Senate has not scheduled a committee vote on the bill.

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