Headline: Crypto fights back — trade group publishes its own stablecoin “principles” after banks push to ban yields The standoff over whether stablecoin holders should be able to earn rewards has moved from private meetings into formal policy papers — and the crypto industry just put its position on the table. After a White House meeting this week between Wall Street bankers and crypto executives failed to yield a compromise, the banking side doubled down with a one‑page memo titled “Yield and Interest Prohibition Principles,” arguing any stablecoin yield threatens traditional bank deposits. In response, the Digital Chamber — a crypto industry trade group — released its own principles paper Friday, defending language in the Senate Banking Committee’s draft Digital Asset Market Clarity Act that would allow certain kinds of stablecoin rewards. CoinDesk obtained the document. What the two sides are arguing about - Banks: Want a blanket prohibition on stablecoin yields, saying rewards for idle holdings resemble bank interest and could siphon deposits from the U.S. banking system. They’ve asked for a two‑year study on stablecoins’ deposit effects. - Crypto industry (Digital Chamber): Willing to concede on anything that looks like an interest payment for static stablecoin balances — the kind of yield that most closely mirrors a bank savings account — but insists rewards tied to activity should be allowed. The Chamber says the requested two‑year study is acceptable so long as it doesn’t trigger automatic regulatory rulemaking. Key protections the Digital Chamber wants to preserve - Rewards linked to providing liquidity (important in DeFi markets). - Rewards that encourage broader ecosystem participation and transactional activity, not passive yield on idle balances. Digital Chamber CEO Cody Carbone framed the paper as a compromise position: the industry will “give up ground” on static‑balance yields but should retain the ability to offer incentives when customers transact or contribute liquidity. He also noted the Chamber includes banking members and hopes its middle‑of‑the‑road stance can revive stalled talks. Political and legislative context - The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) from last year currently shapes the legal landscape for stablecoin innovation. Bankers are seeking edits to that framework through the pending Clarity bill (the Digital Asset Market Clarity Act). - The Senate Agriculture Committee has already advanced its own version of the Clarity Act (commodities‑focused). The Senate Banking Committee’s version emphasizes securities law. Any final bill will likely require bipartisan support to clear the 60‑vote threshold in the full Senate. - The White House has pushed both sides to find a deal by the end of the month; Trump crypto adviser Patrick Witt said another meeting may be scheduled and urged a narrow, targeted fix for “idle yield.” Why this matters The outcome will shape how stablecoins evolve in the U.S.: a strict ban on yields could curb many crypto‑native products, while carveouts for liquidity and participation rewards would preserve core DeFi mechanisms. With negotiations stalled since an 11th‑hour disagreement derailed a Banking Committee hearing last month, the Digital Chamber hopes its written principles will reset talks and steer lawmakers toward a compromise that balances deposit safety with crypto innovation. What’s next Expect more meetings and bargaining in the coming weeks. If banks refuse to move from a blanket prohibition, the impasse could stall the Clarity Act in the Banking Committee — or force the crypto industry to fight for protections in floor debates where broader political math becomes decisive. Read more AI-generated news on: undefined/news

#BTC #ETF