The White House meeting meant to thaw the ice on the crypto market structure bill cracked into the controversial topic of stablecoin yield, with participants saying they made progress on the negotiation as the legislation is still struggling to make headway in the U.S. Senate.
The Monday gathering, led by President Donald Trump's crypto czar, David Sacks, was aimed at some of the sticking points over the legislation, including whether stablecoins should be associated with yield and rewards. Policy experts from the crypto industry and Wall Street banks gathered in the White House's Diplomatic Reception Room for more than two hours to discuss how to overhaul the stickiest provisions of the bill, according to people familiar with the talks.
The talks will continue, the people said, so the difficult negotiation hasn't driven participants from the table.
Cody Carbone, who leads the Digital Chamber that lobbies for crypto policy in Washington, called the meeting "exactly the kind of progress needed to find a resolution to one of the biggest issues blocking next steps in market structure legislative progress."
"Inaction is not an option, and we are committed to rolling up our sleeves and doing the hard work to ensure legislative progress does not punish innovators or consumers who see digital assets as a foundation for their financial future," Carbone said in a statement just after the meeting.
Legislation to govern the U.S. crypto markets has been moving through the congressional process, having passed the House of Representatives last year and cleared one of two necessary Senate committees last week. What remains is still a complicated gauntlet of legislative steps, including advancing through the Senate Banking Committee. It's that committee's work that first highlighted the several points of separation in the multi-party negotiation that involves Republican and Democratic lawmakers, the crypto industry, bankers and the White House.
The stablecoin yield debate is in contention between the digital assets space and traditional bankers, who argue that such yield could catastrophically compete with the deposits business at the core of U.S. banking and credit. But Democrats also held out other demands, including anti-corruption provisions targeted at Trump's crypto businesses, a requirement that the Commodity Futures Trading Commission be fully staffed by commissioners from both parties and more stringent illicit-finance protections to prevent the sector from aiding in criminality.
The Democrats' push for an ethics provision to block senior government officials from cashing in on crypto may be further complicated by a report from the Wall Street Journal that a United Arab Emirates' intelligence chief secretly bought almost half of the Trump-tied World Liberty Financial Inc.
As the White House hosted the Monday meeting, the federal government had once again slid into a partial shutdown over Congress' inability to get a funding plan approved. That raises questions about how much work White House and congressional staff can accomplish on these points while the government's doors are supposed to be closed. A currently negotiated plan is reportedly coming to a head on Tuesday that could re-open the government while leaving an opening to debate the Department of Homeland Security spending separately.
Trump urged House lawmakers to sign off on getting the government re-opened without further changes to the bill that would do so.
"We need to get the Government open, and I hope all Republicans and Democrats will join me in supporting this Bill, and send it to my desk WITHOUT DELAY," the president said in a social media post. "There can be NO CHANGES at this time."
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