The White House has reportedly refocused talks between cryptocurrency and banking lobbyists on limiting how stablecoin rewards are paid out during the two groups’ third meeting on the Cryptocurrency Market Structure Act.
Cryptocurrency and banking industry representatives met at the White House on Thursday for the third time in 16 days to discuss stablecoin legislation, which has stalled a cryptocurrency bill the Senate is poised to pass.
No agreement was reached Thursday, but Coinbase and Ripple executives said there was progress as one White House crypto adviser pushed for a compromise that would allow third parties such as exchanges to offer stablecoin rewards only for transaction activity, not balances.
“We rolled up our sleeves and studied specific language today” – Stuart Alderoty, Ripple’s chief legal officer, sent to X on Thursday. Coinbase’s chief legal officer, Paul Grewal, he said the meeting was “constructive and its tone was cooperative.”
Blockchain Association CEO Summer Mersinger he said the meeting was a “step forward” towards resolving stablecoin reward issues and improving regulations on cryptocurrency market structure.
This is the third meeting of the three parties, which first met on February 2 and again eight days later on February 10, when the Senate intends to pass a bill defining how US market regulators will police cryptocurrencies.
In July, the House passed a similar version of the bill, called the CLARITY Act, but the effort has stalled because the Senate Banking Committee has not yet secured enough bipartisan support to move forward.
Semafor reporter Eleanor Mueller and journalist Eleanor Terrett Both reported that White House crypto adviser Patrick Witt led the discussion at a recent meeting.
Witt pushed for a previously submitted proposal that would allow third parties to offer stablecoin rewards to customers tied to transactions and activity rather than balances, which is a problem for banks.
“Monetizing unused balances, a key goal of the cryptocurrency industry, is not really an option,” Terrett said, citing people present at the meeting. “The debate has narrowed to whether companies can offer rewards tied to specific activities.”
Semafor’s Mueller said banks would begin tomorrow to decide whether to agree to the compromise, and added that discussions would continue in the coming days.
Related: Banks seem unable to support cryptocurrencies, even if they are mainstream
The Bank Policy Institute, American Bankers Association and Independent Community Bankers of America represented the banking industry, and none of them commented publicly on the latest White House meeting.
Banks are afraid of competitive pressure, not the risk of deposit flight
Banking groups argued that stablecoin rewards would compete with and weaken the banking system, leading to a shift of bank deposits to stablecoins.
The U.S. Treasury estimated in April that widespread adoption of stablecoins could result in an outflow of $6.6 trillion in deposits from the banking system.
However, according to Terrett, one bank member present at the meeting said their concerns stemmed more from competitive pressures than deposit flight.
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