The White House is focusing on limited stablecoin rewards as leaders from the crypto and banking industries try to finish a major new crypto law.
Recently, the White House met again with crypto companies and bank representatives. This was the third meeting in just over two weeks. The main topic was how to allow limited stablecoin rewards without causing problems between banks and crypto companies.
There was no final agreement on Thursday. However, people from Coinbase and Ripple said the discussion felt more positive. A White House crypto adviser suggested a compromise.
Exchanges could offer limited stablecoin rewards, but only when users actively use or trade their stablecoins. They would not be allowed to give rewards just for holding stablecoins in an account without using them.
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Ripple’s chief legal officer, Stuart Alderoty, said they discussed the details very carefully. Coinbase’s legal chief, Paul Grewal, said the meeting was constructive and cooperative.
Summer Mersinger, head of the Blockchain Association, said the meeting was a good step forward. She believes it could help remove the roadblock around limited stablecoin rewards and move the crypto bill forward in the Senate.
This was the third round of talks. The first meeting was on February 2, and the second was on February 10. The Senate wants to finalize crypto regulation.
The House of Representatives already passed its version of the bill, called the CLARITY Act, in July. But the Senate Banking Committee still needs support from both political parties to move it forward.
Reports say White House adviser Patrick Witt led the discussion. He supported the idea that third parties could offer limited stablecoin rewards only for real activity, like transactions. Rewards for simply holding stablecoins and earning passive income are likely not allowed. Traditional banks strongly oppose that idea.
The debate’s priority is to find out whether platforms can reward users for specific actions and usage and not for keeping funds idle.
Banking groups plan to meet again to decide if they accept this compromise. More talks are expected soon.
Banks are not as worried about customers pulling out all their deposits as some earlier reports suggested. While the Treasury once warned that trillions of dollars could leave banks if stablecoins grow quickly, some bank representatives say the real concern is strong competition and not a massive withdrawal of deposits.
Major banking groups have not made public comments yet. Still, there is strong pressure on both sides to reach an agreement on limited stablecoin rewards so the larger crypto bill can finally move forward and provide clear rules for the industry.
