White House Weighs Transaction-Based Stablecoin Rewards
The White House convened a third meeting in 16 days with representatives from the cryptocurrency and banking industries on Thursday, refocusing negotiations on how stablecoin rewards should be structured within a pending Senate crypto market structure bill, according to people familiar with the discussions.
No agreement was reached, but executives from Coinbase and Ripple said talks advanced after a White House crypto adviser proposed allowing third parties — such as exchanges — to offer stablecoin rewards only for transaction activity, not on customer balances.
“We rolled up our sleeves and went through specific language today,” Ripple chief legal officer Stuart Alderoty said in a post on X on Thursday. Coinbase chief legal officer Paul Grewal described the session as “constructive and the tone cooperative.”
Blockchain Association CEO Summer Mersinger said the meeting marked a step toward resolving issues around stablecoin rewards and advancing crypto market structure legislation.
It was the third meeting among the parties, following earlier sessions on Feb. 2 and Feb. 10, as the Senate considers legislation to clarify oversight of digital asset markets. The House passed a similar measure, the CLARITY Act, in July, but momentum has slowed in the Senate Banking Committee, which has yet to secure sufficient bipartisan support to advance the bill.
Semafor reporter Eleanor Mueller and journalist Eleanor Terrett reported that White House crypto adviser Patrick Witt led Thursday’s discussion. Witt pressed a previously floated compromise that would permit third parties to provide stablecoin rewards tied to transactions and activity, but not to balances — the latter having been a sticking point for banks.
“Earning yield on idle balances, a key crypto industry goal, is effectively off the table,” Terrett reported, citing meeting participants. “The debate has narrowed to whether firms can offer rewards linked to certain activities.”
Mueller reported that banking representatives are set to begin internal discussions tomorrow on whether to accept the trade-off, with talks expected to continue in the coming days.
The Bank Policy Institute, American Bankers Association and Independent Community Bankers of America represented the banking sector at the meeting. The groups have not publicly commented on the latest talks.
Banks cite competitive pressures over deposit flight risk
Banking groups have argued that stablecoin rewards could compete with traditional banking products and weaken the banking system by shifting deposits toward stablecoins.
The U.S. Treasury estimated in April that widespread stablecoin adoption could result in $6.6 trillion in deposit outflows from the banking system.
However, according to Terrett, one banking participant said concerns are driven more by competitive dynamics than by the risk of deposit flight.
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