US Banks Meet White House On Crypto Market Structure As Stablecoin Rewards Divide Deepens

The talks come after Coinbase withdrew support for a Senate bill that would restrict yield on stablecoins.

• U.S. banking trade groups said they met with the White House on Monday to discuss crypto market-structure legislation.
• People at the meeting said crypto firms pushed to discuss yield-related solutions, while bank groups avoided detailed proposals.
• The talks follow Coinbase’s withdrawal of support for a Senate crypto bill that would ban stablecoin rewards.

U.S. banks and crypto firms held talks at the White House this week as negotiations over the long-awaited crypto bill remain stalled. A coalition of major U.S. bank trade groups issued a joint statement on Monday after meeting at the White House to discuss crypto market-structure legislation.

In the statement, the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America said they met at the White House to discuss legislation on crypto market structure. 

The groups thanked the administration for hosting a “constructive conversation” and for recognizing “the importance of the banking industry’s perspective on market structure legislation.” They added that any legislation should support “local lending to families and small businesses” and protect the “safety and soundness” of the U.S. financial system. 

They also noted that “banks of all sizes” will continue to work with lawmakers, the White House, and other stakeholders to develop policy on digital assets. 

Following the press release, journalist Brendan Pedersen wrote on X that people in the room told him the two industries had “very different approaches to initial negotiations,” adding that crypto representatives wanted to discuss “specific potential solutions on yield,” while bank trade representatives “mostly avoided details.”

Stablecoin Rewards At Center Of Battle

The White House meeting took place as negotiations over a key crypto market structure bill have stalled, in part after Coinbase (COIN) withdrew support for a Senate Banking Committee draft that included a provision to ban rewards on stablecoins, an issue opposed by crypto firms and supported by bank trade groups.

Coinbase (COIN) was trading at $189.4 in the after-hours, up 0.82% on Tuesday. On Stocktwits, retail sentiment around Coinbase remained in ‘bullish’ territory, as chatter around it continued to be at ‘high’ levels over the past day.

However, after a meeting aimed at narrowing differences between the crypto and banking industries, Patrick Witt, a White House official involved in the discussions, said the meeting focused on stablecoin rewards and yield. 

Witt thanked representatives from the crypto and banking industries for participating and said the discussion was “constructive, fact-based, and solutions-oriented.” He added that policymakers have made progress on several difficult policy issues in recent months and expressed confidence that the stablecoin issue could be resolved as well.

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