WASHINGTON — A White House meeting meant to break a months-long standoff between major U.S. banks and cryptocurrency firms ended this week without a deal, leaving key digital-asset legislation in limbo, Reuters reported.
The session, convened by the White House crypto council, brought both sides together in a bid to revive stalled market-structure legislation, but deep divisions remained, Reuters said.
Bank and crypto representatives described the talks as constructive, yet failed to resolve the core dispute over whether stablecoin issuers should be allowed to pay interest in the form of rewards, according to Reuters. CUToday.info has reported extensively on this "loophole" that allows crypto firms to essentially pay interest on crypto holdings through rewards offerings, and how that could steal deposits from credit unions and banks.
FIs argue such rewards could not only drain deposits from insured institutions but also pose risks to financial stability, while crypto firms say the practice is essential to compete and attract users.
The impasse has already delayed action in the Senate Banking Committee, which postponed a vote last month amid concerns that the bill lacked sufficient support, Reuters said. A person who attended this week's closed-door meeting told Reuters that more White House sessions are likely, but no breakthrough is imminent.
At issue is the Clarity Act, a sweeping effort to establish federal rules for digital assets after years of industry lobbying for clearer standards. While the House passed its version in July, progress in the Senate remains stalled, Reuters noted.