White House Urges Banks to Adopt Stablecoin Incentives Now
The White House has urged banks to adopt limited stablecoin incentives as part of the next draft of the crypto market structure bill. This initiative follows a series of discussions between government officials and Wall Street representatives aimed at finding common ground on stablecoin rewards.
Stablecoin Rewards and Legislative Changes
According to sources familiar with the negotiations, the White House is keen on retaining certain rewards programs. The upcoming draft will potentially address the stablecoin section (404) of the U.S. Senate’s Digital Asset Market Clarity Act, which is a key component for regulating the U.S. crypto markets.
- The revisions will modify the earlier Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
- Limited rewards are being discussed for specific activities and transactions linked to stablecoin use.
Previous Meetings and Current Discussions
This marks the third meeting involving White House and banking representatives. During prior discussions, bankers opposed allowing stablecoin rewards, prompting White House negotiators to emphasize that some rewards must be permitted. The aim is to ensure the passage of the legislation without undermining traditional banking operations that rely on interest-bearing deposits.
Patrick Witt, a crypto advisor under President Trump, leads the White House team in these negotiations. The urgency for resolution reflects bankers’ concerns regarding the impact of stablecoin rewards on their business models.
Future Steps and Ongoing Challenges
Industry leaders, including Blockchain Association CEO Summer Mersinger, acknowledged that recent talks were a step forward. However, if banks reject the proposed limited rewards, existing legislation under the GENIUS Act will remain in effect, allowing crypto platforms broader leeway.
A compromise could also influence senators who are hesitant to support the proposed changes. However, several unresolved issues still exist within the Clarity Act. Democratic lawmakers continue to push for stricter regulations against misconduct in the crypto space, particularly within decentralized finance (DeFi).
- Democrats have called for a ban on senior government officials engaging with the crypto sector.
- They have requested the appointment of commissioners for the Commodity Futures Trading Commission and Securities and Exchange Commission.
The Senate Banking Committee is expected to advance this bill in a hearing. However, bipartisan support remains crucial for the legislation to pass, particularly in light of the unresolved issues posed by Democratic members.
