Seeking a solution to 'stablecoin interest'… White House to convene finance and crypto industry on the 10th

The White House is convening a meeting to mediate a dispute between the banking sector and the virtual asset (cryptocurrency) industry over the issue of interest on stablecoins.

According to Crypto In America on the 7th (local time), the White House plans to invite stakeholders from the virtual asset and banking industries to a related meeting on the 10th. Unlike the first round of talks held last week, chief executive officers (CEOs) will not attend this time; instead, senior policy officials from major banks and representatives from associations on both sides are expected to participate to work out concrete coordination.

Major Wall Street banks such as Bank of America (BoA), JPMorgan, and Wells Fargo are included on the invitation list, and PNC, Citigroup, and U.S. Bank are also seen as likely to attend. On the banking side, major interest groups—including the Bank Policy Institute (BPI), the American Bankers Association (ABA), and the Independent Community Bankers of America (ICBA)—are expected to participate, while the crypto sector is expected to be represented by leaders of major projects.

The two sides remain deadlocked. Banks strongly oppose crypto firms paying interest on stablecoin deposits, defining it as a "deposit-like activity." Their argument is that if bank deposits were to flow out en masse in search of higher yields, lending funding would dry up and deal a blow to local economies.

The crypto industry, by contrast, sees this as banks pulling up the ladder behind them. It argues that banks are using regulation to block innovative financial products in order to protect their vested interests. Coinbase CEO Brian Armstrong has also publicly voiced opposition, saying that the "Clarity Act" being pursued by the Senate Banking Committee is tilted in favor of banks.

The government's stance is nuanced. At a Senate hearing on the 6th, U.S. Treasury Secretary Scott Bessent said, "I defend community banks. Volatility in deposits is highly undesirable," adding, "We will work to ensure that interest payments on stablecoins do not create deposit volatility." In effect, he sided with the banks.

The White House is currently pressing for a swift agreement to break the legislative impasse. That is because this issue must be resolved for passage of the "Clarity Act," a virtual-asset market structure bill currently pending before the Senate Banking Committee. Patrick Witt, executive director of the White House's virtual asset council, has set a deadline, saying, "Reach an agreement by the end of this month."

The crypto industry is also moving quickly. Summer Mersinger, CEO of the Blockchain Association, said, "The industry is holding internal meetings almost every day and coordinating a realistic compromise," signaling willingness to negotiate. A banking-sector official likewise said, "We will approach negotiations with a constructive mindset and deliver results."