The White House has pressed the banking and crypto industries to reach a deal on stablecoin yields by the end of February to advance the crypto market structure bill.
Following the meeting brokered by the White House and industry representatives, Patrick Witt, the Executive Director of the President’s Council of Advisors on Digital Assets, appeared optimistic about the bill’s outcome.
He said,
“Over the course of the past few months, we have achieved breakthroughs on several seemingly intractable policy issues. I am confident we will be able to resolve this one (stablecoin yield), too.”
Source: X/Patrick Witt
The bill’s momentum ground to a halt mid-last month after Coinbase pulled its support, citing a ban on stablecoin yield, which has become a key deal-breaker.
Interestingly, Coinbase’s stance was quite different from crypto VC a16z and Ripple, which are the other two key donors behind the industry’s largest super PAC, Fairshake.
In late January, the White House instructed Coinbase to return to the negotiating table. But it has not been smooth sailing.
According to the Wall Street Journal (WSJ), top banking officials, including JPMorgan’s Jamie Dimon, clashed with Coinbase CEO Brian Armstrong over the stablecoin rewards at the World Economic Forum meeting in Davos.
Banks aren’t backing down
Unsurprisingly, bankers have maintained their strong opposition to stablecoin yields, even after the recent White House talks.
In a statement, the American Bankers Association (ABA) called for a ‘thoughtful, effective policy’ around crypto, adding that,
“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.”
Source: ABA
Reacting to the bankers’ statement, Galaxy’s head of research, Alex Thorn, doubted the sector’s willingness to compromise on the bill.
“It reads nice, but it doesn’t really sound like they are willing to compromise here.”
But Summer Mersinger, the CEO of the Blockchain Association, a body representing over 100 crypto firms, including Coinbase, hailed the White House meeting as a ‘step forward’ to advance the bill.
She noted,
“Today’s White House meeting was an important step forward in the effort to deliver bipartisan digital asset market structure legislation to the President’s desk.”
A similar optimistic tone was echoed by another crypto trade union, The Digital Chamber (TDC).
Source: X/TDC
Chance of bill’s passage jumped to +60%
But despite the mixed sentiment from both sides, Polymarket’s odds of passing the bill this year slipped from 65% to 60% after the White House talks.
It’s worth noting that the chance of advancing the bill had increased from 50% to 65% in the past two days ahead of the meeting.
Even so, it remains unclear whether a compromise will be reached by the end of the month.
Source: Polymarket
Final Thoughts
- Crypto trade unions appeared ‘optimistic’ about the progress of the market structure bill following the White House meeting.
- But Galaxy’s Thorn was concerned that a stablecoin yield compromise may remain elusive, preventing the bill from advancing.