On Monday, White House officials met with leaders from the crypto industry and major banking groups in an attempt to ease a key regulatory dispute that has slowed progress on the long-awaited crypto market structure legislation, known as the CLARITY Act.
The meeting focused on one of the most contentious issues holding up the bill: whether stablecoin issuers and related third parties should be allowed to offer yields or rewards for holding stablecoins.
The discussion took place against the backdrop of ongoing lobbying by the banking industry, which has been urging lawmakers to include provisions in the CLARITY Act that would prohibit issuers, as well as third parties, from offering rewards tied to stablecoins.
The crypto industry, however, argues that such restrictions would tilt the playing field in favor of traditional financial institutions, which they say are increasingly concerned about competition from digital asset firms.
Eleanor Terrett of Crypto In America shared more details about the meeting, citing sources familiar with the matter.
According to Terrett, the meeting lasted two hours and was lively, with participants engaging in a balanced exchange on the risks and potential benefits of stablecoin yields.
The meeting brought together a wide range of stakeholders, including representatives from major banking organizations such as the American Bankers Association, the Bank Policy Institute, the Financial Services Forum, the Consumer Bankers Association, and the Independent Community Bankers of America.
Attendees also included Fidelity Investments, PayPal, Paradigm, SoFi, Coinbase, Paxos, Crypto.com, Kraken, Ripple, and Tether, as well as advocacy groups like the Blockchain Association, the Chamber of Digital Commerce, and the Crypto Council.
Other participants included Stripe, Galaxy Digital, Multicoin, Circle, and Cantor.
Following the meeting, Cody Carbone, President of the Chamber of Digital Commerce and Head of Crypto Policy, stated that the talks were a significant step forward.
Cody said the meeting was "exactly the kind of progress needed to address one of the biggest issues holding up market structure legislation."
Patrick Witt, Executive Director of the White House Crypto Council, echoed this sentiment, thanking participants from both the crypto and banking sectors for what he described as a fact-based, solution-oriented dialogue.
Patrick noted that policymakers and industry leaders have made progress in recent months on several policy challenges once thought intractable, and expressed confidence that the stablecoin rewards issue could also be resolved through continued dialogue.
The banking groups involved in the meeting also issued a joint statement reiterating their positions. They emphasized that any final legislation should continue to support local lending to families and small businesses, maintain the stability of the financial system, and promote sustainable economic growth.
Despite the apparent progress, the legislative path forward remains unclear. It is uncertain whether the Senate Banking Committee will follow the lead of the Senate Committee.
The committee had already cleared a major procedural hurdle last Thursday by approving relevant portions of the CLARITY Act during a routine markup.
