The White House convened a high-stakes meeting between cryptocurrency industry representatives and traditional banking leaders, led by the American Bankers Association (ABA) and the Financial Services Forum, to address a critical impasse in crypto market infrastructure legislation. The primary focus was on whether payment stablecoins should be allowed to offer interest or yield to consumers.
The meeting, held in the Diplomatic Reception Room and lasting over two hours, was organized by Patrick Witt, Executive Director of the President’s Council of Advisors on Digital Assets. While crypto firms viewed the gathering positively as a step toward legislative progress, traditional banks adopted a more cautious stance. The ABA explicitly demanded that Senators close what it sees as a regulatory loophole that would permit crypto firms to provide yield on stablecoins, framing it as a threat to the traditional banking model and the safety of the financial system.
The core conflict stems from banks' fear of deposit flight and increased competition, as they would potentially need to offer higher rates to retain customers. The White House has set an ambitious goal for the two sides to reach a compromise on stablecoin yields before the beginning of March, with plans for follow-up meetings involving a smaller working group to draft specific amendments to the pending market structure bill.
Cody Carbone of the Digital Chamber of Commerce hailed the meeting as a "game-changer," emphasizing that such dialogue is necessary to overcome one of the most significant hurdles to comprehensive crypto legislation. However, the path forward remains uncertain, with sources noting that further delays in a Senate vote on the broader market structure bill decrease its chances of passage this year.
