White House to Host Second Meeting on Stablecoin Yield Tuesday
The gathering will include delegates from banks and industry trade groups
The White House has scheduled a second meeting Tuesday afternoon with representatives from the crypto and banking industries, in an effort to broker an agreement on payment of stablecoin yield by crypto firms, three sources familiar with the plans tell Crypto In America.
Similar to last week’s initial meeting, the second gathering will not include company CEOs. However, senior policy staff from individual banks will be present.
Sources familiar with the plans say invitations have already gone out to some of the major banks, including Bank of America, JPMorgan and Wells Fargo, and could also include PNC, Citi, and U.S. Bank. Press representatives for some firms did not immediately respond to requests for comment, while others declined to comment. A White House spokesperson also did not respond.
As before, crypto trade representatives are expected to attend, along with a handful from the banking sector, including the Bank Policy Institute, the American Bankers Association, and the Independent Community Bankers of America, though each side is expected to send fewer participants.
In terms of reaching a deal, it's too soon to say which of the various proposals to resolve this issue may gain traction, though the meeting is expected to discuss specifics for a potential compromise.
To recap, banks want to limit crypto firms from offering interest on stablecoins because they see it as a threat to their business. They fear mass withdrawals to high-yield crypto accounts could leave them short on cash for loans and cause broader financial disruption. Crypto firms, in turn, see it as banks trying to tilt the playing field, protect their regulatory moat, and slow innovation.
In testimony before the Senate Banking Committee on Thursday, Treasury Secretary Scott Bessent appeared to acknowledge that banks’ concerns had some validity, saying, “Look, I’ve been a champion of these small banks, and deposit volatility is very undesirable…We will continue to work to make sure there is no deposit volatility associated with [the payment of yield on stablecoins].”
At stake is the future of crypto market structure legislation, known as the Clarity Act, which is currently awaiting action in the Senate Banking Committee, after Chairman Tim Scott (R-SC) canceled a vote last month following public opposition from Coinbase CEO Brian Armstrong that the bill favored banks by limiting crypto firms’ ability to offer interest on stablecoins to consumers on their platforms. The yield issue has become the White House’s top focus, seemingly even more so than other sticking points like ethics or decentralized finance.
Blockchain Association CEO Summer Mersinger told Crypto In America on Friday that the crypto industry is meeting internally ‘almost daily’ to coordinate on feasible compromises, so they’re ready to bring solutions to the table. The banks also appear clear on their plan of action.
“On our side, we’ve been aligning on the principles we care about, but we’re coming in with a productive mindset and optimism that we can get something done,” a banking industry representative told Crypto In America.
White House Crypto Council Executive Director Patrick Witt has urged the parties to strike a deal by the end of the month.