In the discussions: White House supports certain stablecoin incentives, advises banks to take action.

Sources acquainted with the discussions on stablecoin yields indicate that the White House has encouraged bankers to agree to a proposal that would facilitate the progression of the market structure bill.

The White House may have shifted to support specific stablecoin incentives within the market structure bill. (Jesse Hamilton/CoinDesk)

What to know:

• At the most recent meeting, White House negotiators encouraged bankers to permit limited stablecoin rewards that would not jeopardize their deposit business, as per sources familiar with the discussions.
• Banking representatives at the Thursday gathering reportedly worked on drafting language to facilitate this, although a final version will still need to be shared and evaluated by the banks.

The White House favors limited stablecoin rewards, and if bankers agree, these rewards will be included in the next draft of the crypto market structure bill, according to two individuals knowledgeable about the negotiations.

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During a Thursday working session aimed at finding common ground on stablecoin rewards between banks and the crypto sector, the White House indicated that certain rewards programs would remain in the forthcoming draft of the crypto market structure bill, according to the sources. Wall Street bank representatives who attended the meeting were actively engaged in drafting that language, and the White House is set to compile an updated draft for distribution among them, they noted.

This aspect of the U.S. Senate’s Digital Asset Market Clarity Act — a key policy objective for the crypto industry in Washington — represents one of the significant divisions within the legislation intended to regulate U.S. crypto markets. Notably, the stablecoin section (404 of the draft bill) does not directly pertain to market structure, and the proposed revisions would effectively modify a previous crypto initiative that was enacted last year, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.

This marked the third meeting at the White House between bankers and representatives from the crypto industry, and after bankers had previously resisted allowing stablecoin rewards, White House negotiators presented a stance that some rewards must be permitted for certain transactions and activities, but not for stablecoin holdings that resemble deposit accounts. Led by President Donald Trump’s crypto adviser, Patrick Witt, the White House team sought a swift resolution on this matter to facilitate the advancement of the legislation, the sources reported.

This reflects the concerns expressed by bankers that stablecoin rewards could undermine their core business model reliant on customer interest-bearing deposits.

Participants at the meeting expressed a private hope that the compromise they have awaited may be very near. White House spokespeople did not immediately respond to a request for comment.

"Today’s meeting at the White House was a constructive step forward in addressing unresolved issues related to rewards and maintaining the momentum of market structure legislation," said Blockchain Association CEO Summer Mersinger, who has been part of the discussions, in a statement following the meeting.

If the banks refuse to agree to limited rewards, the current framework remains the GENIUS Act, which provides crypto platforms with considerably greater latitude regarding rewards programs than this proposal would. Conversely, if they endorse this approach, their support could sway hesitant senators back towards approval.

Nonetheless, this represents only one of several gaps in the Clarity Act that require negotiated language. The crypto industry continues to engage with Democratic lawmakers who have urged for increased protections against malicious actors in crypto, particularly in the decentralized finance (DeFi) sector.

Additionally, Democratic negotiators have insisted on several other points that may conflict with the White House’s position. They have called for a prohibition on senior government officials becoming directly involved in the crypto sector — a stance primarily targeting President Donald Trump. They have also requested that the White House appoint a full slate of commissioners at the Commodity Futures Trading Commission and the Securities and Exchange Commission, including filling their Democratic vacancies.

None of the significant concerns raised by the Democrats have been addressed yet. Should the Senate Banking Committee proceed with a hearing to advance the bill, similar to the Senate Agriculture Committee’s actions, the results could again be partisan unless the parties resolve these issues. While this will not obstruct the legislation’s progression to the next stage, it cannot secure overall Senate approval without substantial Democratic backing.

Read More: Latest White House talks on stablecoin yield make ‘progress’ with banks, no deal yet