At a White House meeting called to thaw the ice between crypto firms and Wall Street bankers, the eager crypto insiders — who outnumbered the bankers by a wide margin — came away feeling the banks were dragging their heels on making a deal on crypto market structure legislation.
The White House gave them all new marching orders, according to people familiar with the talks: Get to a compromise on new language on stablecoin yields before the month is out.
The crypto industry’s top policy priority is still struggling to make headway in the U.S. Senate, and the longer it’s delayed from getting a floor vote in the overall Senate, the less likely it is to happen this year.
The Monday gathering — led by President Donald Trump’s crypto adviser Patrick Witt — was largely focused on whether stablecoins should be associated with yield and rewards. Policy experts from the crypto industry and Wall Street banks gathered in the White House’s Diplomatic Reception Room for more than two hours to discuss how to overhaul the stickiest provisions of the bill, the people said.
The talks will continue with a narrower group, the people said, and the White House has asked them to come to the table ready to agree on actual changes to the bill’s language. One of the people said that the banking representatives were members of trade associations and may need to get buy-in from their members before they can make a move in the negotiation.
For their part, the banking participants said in a joint statement that they’re willing to keep at it “to help develop thoughtful, effective policy.”
“We must ensure that any legislation supports the local lending to families and small businesses that drives economic growth and protects the safety and soundness of our financial system,” said the bank groups, including the American Bankers Association and the Financial Services Forum, which represents the top Wall Street CEOs.
Despite the lack of an immediate compromise over yields, Cody Carbone, who leads the Digital Chamber that lobbies for crypto policy in Washington, called the meeting “exactly the kind of progress needed to find a resolution to one of the biggest issues blocking next steps in market structure legislative progress.”
“Inaction is not an option, and we are committed to rolling up our sleeves and doing the hard work to ensure legislative progress does not punish innovators or consumers who see digital assets as a foundation for their financial future,” Carbone said in a statement just after the meeting.
And another of the negotiators, the Blockchain Association CEO Summer Mersinger, said that the Monday event was “an important step forward in finding solutions to deliver bipartisan digital asset market structure legislation, and we applaud [crypto adviser] Patrick Witt and the administration’s leadership in bringing stakeholders together to work through one of the key remaining issues: stablecoin rewards.”
From the crypto side, the meeting also included representatives from Coinbase, Circle, Ripple, Crypto.com and the Crypto Council for Innovation.
Legislation to govern the U.S. crypto markets has been moving through the congressional process, having passed the House of Representatives last year and cleared one of two necessary Senate committees last week. What remains is still a complicated gauntlet of legislative steps, including advancing through the Senate Banking Committee. It’s that committee’s work that first highlighted the several points of separation in the multi-party negotiation that involves Republican and Democratic lawmakers, the crypto industry, bankers and the White House.
The stablecoin yield debate is in contention between the digital assets space and traditional bankers, who argue that such yield could catastrophically compete with the deposits business at the core of U.S. banking and credit. But Democrats also hold out other demands, including anti-corruption provisions targeted at Trump’s crypto businesses, a requirement that the Commodity Futures Trading Commission be fully staffed by commissioners from both parties and more stringent illicit-finance protections to prevent the sector from aiding in criminality.
The Democrats’ push for an ethics provision to block senior government officials from cashing in on crypto may be further complicated by a report from the Wall Street Journal that a United Arab Emirates’ intelligence chief secretly bought almost half of the Trump-tied World Liberty Financial Inc.
As the White House hosted the Monday meeting, the federal government had once again slid into a partial shutdown over Congress’ inability to get a funding plan approved. That raises questions about how much work White House and congressional staff can accomplish on these points while the government’s doors are supposed to be closed. A currently negotiated plan is reportedly coming to a head on Tuesday that could re-open the government while leaving an opening to debate the Department of Homeland Security spending separately.
Trump urged House lawmakers to sign off on getting the government re-opened without further changes to the bill that would do so.
“We need to get the Government open, and I hope all Republicans and Democrats will join me in supporting this Bill, and send it to my desk WITHOUT DELAY,” the president said in a social media post. “There can be NO CHANGES at this time.”
Read More: Crypto bill clears U.S. Senate milestone despite Democrat opposition
Nikhilesh De contributed reporting.
UPDATE (February 2, 2025, 21:22 UTC): Adds details from meeting and comment from Blockchain Association.
UPDATE (February 2, 2025, 22:32 UTC): Adds details on makeup of banking participants.
UPDATE (February 2, 2025, 22:46 UTC): Adds statement from banking groups.
