A second round of discussions at the White House this month brought crypto executives and banking lobbyists back to the table, as lawmakers try to salvage momentum behind a stalled US crypto market structure bill.
Participants described the session as constructive, but no agreement was reached on one of the most divisive issues: whether stablecoin holders should be allowed to earn yield.
Ripple Chief Legal Officer Stuart Alderoty, who attended the meeting, said on X that the conversation was “productive” and that bipartisan momentum remains. Still, the core dispute between banks and crypto firms remains unresolved.
Stablecoin Yield Remains the Flashpoint
At the center of the debate is whether stablecoins — digital tokens pegged to the US dollar — should be allowed to generate yield for holders through third-party platforms such as exchanges.
Banking groups argue that yield-bearing stablecoins could divert deposits away from traditional banks, potentially weakening the funding base that supports lending and local economic activity.
According to participants, banking representatives presented “yield and interest prohibition principles” during the meeting. These principles would seek to ban stablecoin-related yield payments in forthcoming Senate legislation.
Crypto advocates counter that prohibiting such rewards could limit innovation and push activity offshore. Dan Spuller, industry affairs lead at the Blockchain Association, described the session as “serious problem-solving” but said banks arrived with broad prohibitive principles rather than negotiating directly from legislative text.
The disagreement has already affected the broader bill’s prospects. Last month, Coinbase withdrew support for the draft market structure legislation, citing provisions that would prohibit all yield payments tied to stablecoins.
Why Congress Is Stuck
Congress has been attempting to pass comprehensive crypto market structure legislation to clarify which federal agencies — primarily the Securities and Exchange Commission and the Commodity Futures Trading Commission — would oversee digital assets.
The House passed a version of such legislation, known as the CLARITY Act, in July. However, the bill has not advanced in the Senate, where the Banking Committee has yet to secure sufficient bipartisan backing.
The stablecoin yield dispute has emerged as one of the key obstacles.
Three major banking groups — the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America — said in a joint statement that further discussions are necessary. They argued that any framework must promote innovation without undermining financial stability or putting bank deposits at risk.
GENIUS Act Adds Another Layer
The debate is also unfolding alongside the GENIUS Act, separate legislation that already prohibits stablecoin issuers from paying yield directly to holders.
BitGo CEO Mike Belshe urged both sides to avoid reopening that fight. He argued that the GENIUS Act settled the question of issuer-paid yield and that the broader market structure bill should not be delayed over related disputes.
“If you don’t like GENIUS, amend it,” Belshe said, adding that market structure legislation should move forward independently.
What’s at Stake Now
The White House meetings signal that the administration is actively trying to broker a compromise between banks and the crypto industry. A previous meeting on Feb. 2 was described by White House crypto adviser Patrick Witt as constructive and fact-based.
For lawmakers, timing matters. Supporters of the bill argue that regulatory clarity is needed to keep digital asset activity within the United States and reduce legal uncertainty that has weighed on exchanges, token issuers, and investors.
Opponents of yield-bearing stablecoins warn that allowing deposit-like returns outside the regulated banking system could reshape how consumers store cash-equivalent assets.
With bipartisan momentum described as fragile but present, the coming weeks may determine whether Congress can resolve the yield dispute or whether stablecoin policy will once again stall broader crypto legislation.
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