White House narrows stablecoin rewards in Senate negotiations

Senior White House officials convened representatives from the cryptocurrency sector, trade groups and the banking industry to try to hammer out clause-level language on whether stablecoins may carry recurring, yield-like rewards — a central sticking point holding up the CLARITY Act in the Senate.

Administration advisers and participants described a concrete proposal that would confine third‑party reward mechanics to activity‑based payments — rewards tied to transactions or other customer actions — and bar interest‑like payouts on held balances, a move intended to reduce deposit‑replacement risk for banks.

Several sources characterized the session as substantive and long: attendees reported it ran more than two hours, and the White House has urged the parties to deliver specific drafting proposals within weeks to convert private assurances into committee‑ready text.

The convening was the latest in an intensive stretch of contacts — the White House counts this as the third session in 16 days with banks and crypto firms — reflecting a shift from public posturing to clause‑level bargaining and closer SEC–CFTC coordination aimed at limiting overlapping jurisdictional signals.

Executives from platforms including Coinbase and Ripple participated, even as other reporting has highlighted that Coinbase previously paused or withdrew a public endorsement of an earlier draft — underscoring a split between private engagement and public positioning.

No final statutory language was agreed, and negotiators face competing procedural pressures: markups have been delayed after wavering backers, and some staffers are weighing mechanisms — such as conditioning the statute’s effective date on the Commodity Futures Trading Commission achieving a quorum — that would tie confirmation fights to legislative bargaining.

Outside the rooms, industry behavior is mixed. Some firms are tightening or pausing product rollouts pending clarity, while spot crypto products have continued to attract inflows; international developments like Europe’s MiCA regime are also influencing where teams prioritize deployments.

If lawmakers adopt a transaction‑only reward model, custodial exchanges and wallets will likely redesign offerings toward activity‑linked fees and rebates, preserving revenue without paying interest on balances — a shift that could compress margins for smaller competitors and amplify the role of regulated intermediaries.

Practically, a transaction‑only rule is administratively straightforward but technically porous: platforms could engineer micro‑transaction schemes or rebating loops that mimic balance yields unless the statute includes explicit anti‑avoidance tests and telemetry thresholds, a concern flagged by negotiators and policy analysts.

With limited weeks to turn executive‑level understandings into precise statutory clauses that can survive committee scrutiny, expect sustained shuttle diplomacy, interagency coordination, and a focus on narrowly tailored amendments in the near term as lawmakers try to balance financial‑stability safeguards with industry competitiveness.