The White House has pressured the banking and crypto industries to reach an agreement on stablecoin yields by the end of February to advance the Crypto Market Structure Act.
After the meeting hosted by the White House and industry representatives, Patrick Witt, the executive director of the President’s Council of Advisors on Digital Assets, seemed optimistic about the bill’s outcome.
He said,
“Over the course of the past few months, we have made breakthroughs on several seemingly intractable policy issues. I am confident we will be able to solve this (stablecoin yield) as well.”
Source: X/Patrick Witt
The bill’s momentum stalled after Coinbase in the middle of last month drawn his support, citing a ban on stablecoin proceeds, which has become a major dealbreaker.
Interestingly, Coinbase’s position was very different from crypto VC a16z and Ripple, the other two major donors behind the industry’s largest super PAC, Fairshake.
Late January, the White House instructed Coinbase returns to the negotiating table. But it didn’t go smoothly.
According to the Wall Street Journal (WSJ), top banking officials, including JPMorgan’s Jamie Dimon, collided with Coinbase CEO Brian Armstrong on stablecoin rewards at the World Economic Forum meeting in Davos.
Banks don’t give up
Unsurprisingly, bankers have maintained their strong opposition to stablecoin interest rates even after the recent White House talks.
In one statementThe American Bankers Association (ABA) called for “thoughtful, effective policies” around crypto, adding:
“As we shared at 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
Commenting on the bankers’ statement, Alex Thorn, Galaxy’s head of research, said: doubted the sector’s willingness to compromise on the bill.
“It’s a nice read, but it doesn’t really sound like they want to make any compromises here.”
But Summer Mersinger, the CEO of the Blockchain Association, a body representing more than 100 crypto companies including Coinbase, greets the White House meeting as a “step forward” to move the bill forward.
She noted:
“Today’s meeting at the White House was an important step forward in the effort to deliver bipartisan legislation on the structure of the digital asset market to the President’s desk.”
A similarly optimistic tone was echoed by another crypto union, The Digital Chamber (TDC).
Source: X/TDC
The chance that the bill will be passed has increased to +60%
But despite mixed sentiment from both sides, Polymarket’s chances of passing the bill this year have fallen from 65% to 60% after the White House talks.
It is worth noting that the probability of bringing forward the bill increased from 50% to 65% in the last two days leading up to the meeting.
Still, it remains unclear whether a compromise will be reached by the end of the month.
Source: Polymarkt
Final thoughts
- Crypto unions seemed ‘optimistic’ about the progress of the market structure bill after the White House meeting.
- But Galaxy’s Thorn was concerned that a compromise on stablecoin yields would remain elusive, preventing the bill from rising further.