The White House made tangible progress on the U.S. stablecoin debate during a Thursday closed-door meeting with top banking and crypto leaders. Officials suggested limited rewards could remain in the Senate’s Digital Asset Market Clarity Act, shifting from earlier ambiguity. Banks had demanded a total ban, warning rewards would drain traditional deposits. Both sides explored a middle ground: incentives only for specific transactions, not passive holding.
Banking Compromise: Transaction-Linked Rewards Replace Interest-Like Payouts
Banks floated allowing rewards tied to on-chain actions or transfer volumes, avoiding any resemblance to interest payments. Patrick Witt, President Trump’s crypto adviser, led the White House team and stressed urgency, telling participants: “Move quickly so broader legislation can advance.” A new draft reflecting the compromise will be circulated; banks must review and sign off before the March 1 deadline.
Democratic Push for DeFi Oversight Clouds Final Outcome
Despite the breakthrough, hurdles remain. Some Democratic lawmakers are demanding tighter oversight of decentralized finance platforms, which could stall the bill. For stablecoin issuers like Tether and Circle, the White House’s cautious backing of limited rewards is a positive signal—but the final language depends on how narrowly “transaction-based” incentives are defined. The next few days will determine whether the compromise survives the bank review and Democratic scrutiny.