Bank and cryptocurrency leaders met at the White House but failed to reach an agreement on stablecoin yields, with banks proposing a complete ban and the cryptocurrency industry strongly opposing it.
The second meeting between cryptocurrency and banking leaders at the White House today failed to reach a definitive conclusion on the issue of stablecoin yields, a topic that has stalled the cryptocurrency market framework bill. The closed-door discussion aimed to resolve the long-standing dispute between the two sides, with participation from organizations such as Ripple, Coinbase, the Crypto Council for Innovation, the Blockchain Association, and major banks like Goldman Sachs, Citi, and JPMorgan Chase.
Banks argue that allowing interest rate payments would draw deposits away from traditional institutions and could create liquidation problems, while crypto asset companies argue that this restriction would stifle innovation.
According to documents leaked to the press, banks have issued a comprehensive “prohibition principle,” calling for a ban on any financial or non-financial benefits associated with holding stablecoin payments, along with strict enforcement mechanisms and tight restrictions on marketing that could imply yields similar to deposit rates.
Strong reaction from the cryptocurrency industry.
This stance goes beyond the latest draft of the market structure bill, which only prohibits yields on passive stablecoin holdings but still allows narrower activity-based rewards. The banks stressed that any exceptions to the ban “must be extremely limited in scope.”
A source familiar with the matter said that stakeholders in the cryptocurrency industry have strongly opposed many of these principles and are “really taking their positions to the end,” particularly those concerning anti-circumvention and enforcement.
Dan Spuller, Executive Vice President of the Blockchain Association, commented: “The banks didn’t come to negotiate based on the text of the bill, but rather brought with them overarching prohibition principles, and this remains a key point of contention.” Sources indicate that the organizations representing both industries will likely continue to clarify the details themselves, while the initiative appears to have returned to the Senate Banking Committee.
Despite remaining disagreements, key representatives in the cryptocurrency sector expressed optimism about the future of the market structure bill, which will establish regulatory boundaries between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Stuart Alderoty, Ripple's chief legal officer, commented: "The session was constructive, and an atmosphere of compromise is present."
The bipartisan momentum clearly remains in favor of a sound market structure framework.” Paul Grewal, Coinbase’s Chief Legal Officer, also said the meeting made progress but “there is definitely still a lot of work to be done.”
