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On Tuesday afternoon, a second meeting at the White House will attempt to push banks and crypto firms toward negotiating securing ties on stablecoin yields — one of those key disputes that has blocked progress on the CLARITY Act as well as fueling tensions between banks (and crypto companies) and other businesses.
The meeting follows a previous closed-door session which concluded unconventionally on whether digital asset companies should be allowed to pay interest on stablecoins. Such measures have been opposed by banks, which warned that “the yield-bearing stablecoins could lead to large deposits outflows from the traditional financial system” and’significant deposit withdrawals of money.”
As with the first meeting, Tuesday talks will be based on senior staff and trade groups rather than top executives — “fewer people from each industry attend,” Crypto in America reported. A session will be about ‘practical details’ for a possible compromise.
Negotiators will work to resolve tensions between banks’ concerns over deposit volatility and crypto firms’ efforts to offer interest-bearing stablecoins.
By late February, both camps are under pressure to deliver a compromise proposal for the proposed compromise. Any advance would decide the fate of pending crypto legislation and shape future market rules.
Bloomberg reported last week that crypto firms are launching new proposals to cut off differences with banks over stablecoins and keep crypto regulation talks on track. Community banks will be able to hold more of the stablecoin market (including custody of reserve funds and joint ventures) in order for community banks to issue bank-backed digital currencies.
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