TLDR:
- Senators Tillis and Alsobrooks reached a White House-backed agreement in principle on stablecoin yield language.
- The deal proposes barring yield payments on passive balances to address bank concerns over deposit flight.
- White House adviser Patrick Witt called the agreement a major milestone toward passing the CLARITY Act.
- The agreement still requires vetting from banking and crypto industry groups before any final deal is confirmed.
Stablecoin regulation in the United States may be edging closer to a major breakthrough. Key senators and White House officials have reached a tentative agreement on crypto legislative language.
The deal addresses a long-standing clash between banks and digital asset firms over yield payments. Sen. Thom Tillis (R-N.C.) and Sen. Angela Alsobrooks (D-Md.) spearheaded the agreement. Their deal could unlock a path forward for landmark crypto legislation stalled since January.
Senators Bridge Partisan Divide Over Stablecoin Yield
The central dispute in this legislation has been about yield payments to stablecoin holders. Banks and Wall Street groups raised concerns about widespread deposit flight from traditional accounts.
They argued that stablecoin yield rewards could pull customers away from conventional banking products. The clash had been keeping the crypto bill stalled in the Senate Banking Committee since January.
Both Tillis and Alsobrooks acknowledged those banking concerns throughout the negotiation process. Alsobrooks confirmed the two senators have reached a deal, stating, “Sen. Tillis and I do have an agreement in principle.”
She added that the deal seeks to “protect innovation” while also giving lawmakers the opportunity to “prevent widespread deposit flight.” Her comments came during a Friday interview following talks with White House officials.
The new language is expected to target yield payments made on a passive balance. Alsobrooks confirmed the proposal will seek to bar yield payments “on a passive balance,” though full details remain undisclosed.
The specifics are still being worked through as lawmakers prepare to share the language with industry stakeholders.
Tillis echoed a cautiously optimistic tone when speaking about the progress made. “In working with the White House, I think we have an agreement,” he said in a separate interview.
He noted that the next step is to vet the language with industry, describing them as “a party to an ultimate deal.” He added that he feels “like we’re in a good place” with where negotiations currently stand.
White House Endorses Deal as Industry Review Awaits
The White House played an active role in brokering the tentative stablecoin agreement. Patrick Witt, a top White House crypto policy adviser, publicly addressed the development on X.
He credited both Tillis and Alsobrooks “for bridging the partisan divide to tackle a difficult issue.” His public comments came shortly after the story of the agreement was first published.
Witt also acknowledged in his post that more work remains before the bill is finalized. He wrote that there is “more work to be done to close out this and other outstanding issues.”
Despite that, he described the development as “a major milestone toward passing the CLARITY Act.” That bill has been held up in part due to the ongoing bank-crypto yield dispute.
Still, the agreement does not guarantee automatic support from the banking and crypto industries. Both sectors will need to review the final language before giving any formal endorsement.
Industry groups on both sides have strong interests in the outcome of this legislation. Any final version of the bill will need broad backing from both sectors to pass.
The coming weeks will be critical in determining whether the CLARITY Act can advance. Senators and White House officials will continue working to address any remaining sticking points. A finalized agreement could clear the way for a vote in the Senate Banking Committee.
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