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Crypto Prune > Regulation > Interest payments on inactive stablecoins will be “effectively eliminated”
Regulation

Interest payments on inactive stablecoins will be “effectively eliminated”

2 hours ago 5 Min Read

The debate over stablecoin remuneration in the United States appears to be progressing well, despite some setbacks for the emerging digital asset industry.

The third meeting included participants from the White House, bankers, and crypto entrepreneurs. They agreed on one point.: Interest payments on inactive stablecoins, i.e. those that remain in a wallet or platform without trading and passively generate income, have been excluded.

According to information covered by American journalist Eleanor Tellet, the closed-door meeting in Washington was attended by representatives of crypto companies such as Coinbase, Ripple, and A16Z. They spoke with banking organizations such as the American Bankers Association (ABA), the Bank Policy Institute (BPI), and the Independent Community of American Bankers (ICBA).

Unlike previous meetings that ended without an agreement, this time the government took the lead. White House Cryptocurrency Council Executive Director Patrick Witt presents draft transparency law That became the centerpiece of the conversation.

The document acknowledges concerns raised by banks regarding stablecoin yields and potential deposit flight. At the same time, he clarified that future restrictions on compensation will be limited in scope.

According to Terret, the text makes clear that profiting from inactive stablecoin balances, an issue that has become a major goal of the crypto industry. virtually excluded.

Current debate focuses on whether companies can provide compensation in connection with certain activities, such as trading. Additionally, the draft law establishes a penalty of $500,000 per day for anyone who circumvents this restriction and provides these benefits.

What are bankers and crypto entrepreneurs saying?

As Terret points out, crypto sector officials argued after the meeting that banks’ concerns about these profits are: It seems to be coming from competitive pressure. than the possible outflow of bank deposits.

See also  White House pushes progress in virtual currency law

Similarly, Coinbase legal director Paul Grewal said the conversation had a “constructive” and “collaborative” tone. A similar point was made by Ji Hoon Kim of the Cryptocurrency Innovation Council, who said the meeting was “constructive” and that new progress could be made in the coming days.

However, those in the traditional sector argue the risks of stablecoin deposit returns and propose that the Clarity Act include a study on stablecoin exits. they want clarify the relationship Between the growth of the payments stablecoin market and the possible impact on bank deposits.

Bankers are “encouraged by the language proposed in the bill,” Tellet said. In his opinion, this would give the SEC, Treasury, and CFTC the power to enforce the “prohibition on repayments of dormant balances with civil penalties.”

Other visions of the meeting in Washington, such as that of journalist Paul Barron, suggest that the banks are now in control of the ball and are “holding the Clarity Act hostage” under pressure from the White House. This opinion highlights the idea that the sector “continues to want to ban stablecoin performance because it fears competition,” the reporter said.

“I hope they give in soon,” Baron said. He recalled that banks “have already lost billions of dollars in financial technology because their products are terrible.”

“This is not and never will be a deposit leak. They are now trying to push for a better deal for ordinary people just to protect their own pockets. Congress: Let’s not allow the United States to become a crypto graveyard while the rest of the world dominates crypto,” Baron said.

See also  Bitcoin is back among Arizona lawmakers

Now, what will happen to the Clarity Law?

With this progress, next Bankers assess whether there is room for agreement Working with the crypto sector to finally unlock the game and enable Clarity’s legislative push. If so, stablecoin rewards would be allowed for certain activities.

“Sources indicated that the[White House’s]deadline of the end of this month does not seem unrealistic and that negotiations will continue over the next few days,” Tellet said. It is managed as follows, deadline Next year it will be March 1st.

Similarly, Patrick Witt, writing in X magazine, emphasized that the talks represented a “huge step forward” and assured: The parties are nearing a final agreement.

“As long as both sides continue to work in good faith on this issue, I am hopeful that the deadline will be met,” Witt said. Remember, the deadline set by the White House is March 1st. The Clarity Act is expected to be signed by US President Donald Trump in April.

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