Banks softened stance by allowing possible exemptions but still pushed for a broad ban on stablecoin yield rewards.
Crypto firms sought wider definitions of permissible activities while banks argued rewards risk deposit flight.
Talks were called productive yet no deal emerged as pressure builds to resolve disputes before March 1.
White House officials hosted a second meeting on stablecoin yield rules this week as banks and crypto firms sought progress on the CLARITY Act. The talks took place Tuesday in Washington and included senior industry executives and regulators. According to Eleanor Terrett, participants called the meeting productive, although no compromise emerged by the end.
Banks and Crypto Firms Detail Positions on Stablecoin Rewards
According to Eleanor Terrett, both sides arrived better prepared than during the first meeting. Banking representatives presented written “prohibition principles” outlining acceptable and unacceptable terms on stablecoin rewards.
Notably, the document included language allowing “any proposed exemption,” a shift from earlier positions. Previously, banks refused to discuss exemptions tied to transaction-based rewards. This change marked a limited concession during negotiations.
However, the document still called for a general ban on stablecoin yield. The principles proposed barring any financial or non-financial consideration linked to holding or using payment stablecoins.
Banks argued rewards could encourage deposit flight and threaten traditional lending. Trade groups present included the American Bankers Association, Bank Policy Institute, and ICBA.
Crypto representatives focused heavily on defining “permissible activities.” They pushed for broader definitions that allow rewards tied to account usage. Banks, however, sought narrower language to limit such activity.
Ripple CLO Signals Movement as Talks Continue
Ripple Chief Legal Officer Stuart Alderoty described the meeting as productive in a post on X. He stated that “compromise is in the air” as discussions continue. Alderoty attended alongside Paul Grewal of Coinbase, Miles Jennings of a16z, and executives from Paxos and the Blockchain Association.
Summer Mersinger, CEO of the Blockchain Association, echoed that discussions remained constructive. Ji Kim of the Crypto Council for Innovation also confirmed ongoing engagement. However, no final agreement emerged during the session.
The meeting was led by Patrick Witt, Executive Director of the President’s Crypto Council. Senate Banking Committee staff were also present. Notably, the White House reduced attendance compared with the first meeting.
Legislative Pressure Builds Ahead of March Deadline
The White House urged both sides to reach a deal by March 1. Further discussions are expected in the coming days. However, it remains unclear whether another large-scale meeting will occur before month’s end.
The stablecoin yield debate continues to block Senate Banking Committee action on the Digital Asset Market Clarity Act. Although the bill passed the House last year, unresolved disputes remain. For now, talks continue without a final resolution.
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