A White House meeting on stablecoin yields and rewards wrapped up without a deal, but participants described the discussions as more productive than previous talks, according to details shared by journalist Eleanor Terrett. Senior banking executives, crypto industry leaders, and policy staff debated whether stablecoin issuers should be allowed to offer yield or rewards. While no compromise was reached, negotiations moved into more detailed territory.
Banks Submit Written 'Prohibition Principles'
Banking representatives arrived with a written set of 'prohibition principles' outlining firm red lines around stablecoin rewards. These principles detailed what banks are willing to accept and where they refuse to budge. One notable shift emerged: banks included language allowing for 'any proposed exemption' related to transaction-based rewards. Sources described this as a meaningful concession, as banks had previously declined to discuss exemptions altogether.
Much of the debate centered on 'permissible activities' — what types of account behavior would allow crypto firms to offer rewards. Crypto companies pushed for broad definitions; banks argued for narrower limits to reduce risk and regulatory exposure.
Transaction-Based Rewards May Get Exemption
Ripple’s Chief Legal Officer Stuart Alderoty said that 'compromise is in the air', signaling cautious optimism despite unresolved issues. The meeting was smaller than the first White House session on stablecoins, led by Patrick Witt, Executive Director of the President’s Crypto Council. Staff from the Senate Banking Committee also attended. Crypto attendees included representatives from Coinbase, a16z, Ripple, Paxos, and the Blockchain Association. Major banks in attendance included Goldman Sachs, JPMorgan, Bank of America, Wells Fargo, Citi, PNC, and U.S. Bank, alongside leading banking trade groups.
March 1 Deadline Looms
The White House has urged both sides to reach an agreement by March 1. Further discussions are expected in the coming days. It remains unclear whether another full-scale meeting will be held before the deadline. Banks signaled limited flexibility by acknowledging potential exemptions for transaction-based stablecoin rewards, but their overall stance remains firm. Crypto firms continue to push for broader definitions to maintain product competitiveness. The tension between the two sides is sharpening as details emerge — banks building walls with 'prohibition principles,' crypto firms chipping away with 'exemption clauses.'