BlockBeats report: On February 20, according to crypto journalist Eleanor Terrett, yesterday morning’s third meeting on the Cryptocurrency Market Structure Act (also known as the CLARITY Act), focusing on stablecoin yields, had a smaller attendance than last week. Representatives from Coinbase, Ripple, a16z, and crypto industry associations attended, but no individual banking representatives were present—banking perspectives were conveyed through industry associations. The tone of this meeting was notably different: the White House led the discussions, rather than allowing crypto companies and banks to dominate the conversation as in previous meetings.
Patrick Witt, Executive Director of the White House Crypto Committee, introduced a draft text that became the focus of discussion. The text acknowledged concerns raised last week by banks in their document on the "Prohibition of Yield and Interest," while clearly stating that, in any legislation related to stablecoins, a key goal of the crypto industry—earning yield on idle stablecoin balances—is effectively off the table. The debate has now narrowed to whether crypto companies can offer stablecoin rewards tied to specific activities.
Banks' concerns appear to stem more from competitive pressures than from the initially presumed worry about deposit outflows. Bank sources said they are still pushing to include a study on deposit outflows in the draft—this study would examine the growth of payment stablecoins and their potential impact on bank deposits. Additionally, the banking sector is encouraged by the proposed anti-tax avoidance provision, which would empower the Securities and Exchange Commission, the Treasury, and the Commodity Futures Trading Commission to enforce a ban on earning interest on idle balances, imposing civil penalties of $500,000 per day for each violation.
Sources say it is possible that discussions will be finalized before the end of the month, with negotiations set to continue over the coming days.