Key Points:
- A White House meeting between banks and crypto firms ended without an agreement.
- The dispute centers on whether crypto companies can pay interest on stablecoins.
- Banks fear that allowing crypto rewards will cause a massive flight of deposits.
- The House passed its version of the bill in July, but it remains stuck in the Senate.
A high-stakes meeting at the White House on Monday failed to resolve a bitter dispute between big banks and cryptocurrency companies, leaving a major piece of legislation stuck in limbo. The White House’s crypto council brought representatives from both industries together behind closed doors to try and save the stalled bill, but the group broke up without reaching a deal.
The core of the fight is about “stablecoins,” which are digital tokens pegged to the U.S. dollar. Crypto companies want the right to pay interest or offer rewards to customers who hold these coins. They argue these perks are essential for attracting new users and competing in the market.
Banks, however, are strongly against this. They worry that if stablecoins offer high rewards, people will pull their money out of traditional savings accounts to chase better returns. Since customer deposits are the primary way banks fund their loans, lenders argue that this could drain their resources and threaten the stability of the entire financial system. They want the new law to specifically ban crypto firms from paying these kinds of rewards.
Major trade groups attended the session, including the American Bankers Association and the Blockchain Association. While both sides were polite and described the talks as “constructive,” a source inside the room confirmed that the fundamental disagreement remains unresolved.
This standoff has already derailed progress in Congress. The “Clarity Act,” which the crypto industry has lobbied for to establish clear federal rules, passed the House of Representatives in July. However, the Senate Banking Committee had to postpone a key vote last month because of this exact argument over stablecoins.
Crypto firms insist they need this law to operate with legal certainty in the United States. Without a compromise, the legislation cannot move forward. Sources expect the White House to call for more meetings soon to try and force a breakthrough, but for now, the two powerful industries remain at odds.
