White House meeting fails to solve crypto legislation impasse

Leaders from the US crypto and banking industries met on Monday at the White House to try and iron out differences over the Senate Banking Committee's digital asset legislation, but the meeting ended with the two sides appearing to still be far apart on a compromise.

The meeting was led by President Trump's crypto czar Patrick Witt and featured lobbyists for the banking industry as well as crypto insiders, "who outnumbered the bankers by a wide margin," according to CoinDesk.

The White House has reportedly told the two sides to resolve their differences before the end of the month, but as of now that seems increasingly unlikely.

The crypto industry's top priority is to allow for the inclusion of stablecoin rewards, but bank lobbyists have been adamantly opposed to it, calling it a "loophole" that crypto companies are exploiting in the GENIUS Act's stablecoin law.

Although the GENIUS Act, which provided a regulatory framework for stablecoins, prohibits stablecoin issuers from offering interest on the assets, it did not ban rewards.

However, when the Senate Banking Committee's latest draft for the CLARTY Act included a ban on stablecoin rewards, Coinbase Global (COIN) pulled its support for the bill, prompting the vote to be delayed.

While the GENIUS Act was focused on stablecoins, the CLARITY Act aims to provide a regulatory framework around the broader crypto industry in the United States.

Coinbase CEO Brian Armstrong expressed his disappointment with the revised draft on social media, saying it included "amendments that would kill rewards on stablecoins, allowing banks to ban their competition."

According to CoinDesk, the crypto insiders who attended the meeting at the White House on Monday, "came away feeling the banks were dragging their heels on making a deal on crypto market structure legislation."

Trump's crypto czar remains confident

While the meeting ended with no resolution on stablecoin rewards and yield, Witt said in a post on X that the "discussion was constructive, fact-based, and, most importantly, solutions-oriented."

"Over the course of the past few months, we have achieved breakthroughs on several seemingly intractable policy issues," he added. "I am confident we will be able to resolve this one too."

In a statement after the meeting, the American Bankers Association (ABA), an industry lobbying group, called the meeting "constructive" and thanked the Trump administration "for recognizing the importance of the banking industry's perspective on market structure legislation."

​​"As we shared in the meeting, we must ensure that any legislation supports the local lending to families and small businesses that drives economic growth and protects the safety and soundness of our financial system," the ABA said.

The ABA argued in a letter to the Senate last month that stablecoin rewards could lead to "billions" being "displaced from community bank lending," causing small businesses, students, home buyers and others to suffer.

Meanwhile, The Digital Chamber, a blockchain trade association, called the meeting at the White House "exactly the kind of progress needed to find a resolution to one of the biggest issues blocking next steps in market structure legislative progress."

“We look forward to continuing this kind of work to ensure market structure rules of the road will become law before this Congress ends,” the group said. “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.”

The legislation could face another hurdle as Democratic lawmakers are pushing for a provision that would address potential conflicts of interest in order to prevent politicians from profiting off their crypto holdings while the federal government is also regulating the markets.

The Democrats are especially concerned about the growing crypto empire that the Trump family is building while President Trump currently occupies the White House.