A meeting in the White House has not yielded a breakthrough in the negotiations on the so-called Clarity Act, a controversial law that tightens the relationship between banks and stablecoin issuers.
Representatives of the financial sector and major crypto companies spoke for more than two hours with Donald Trump’s advisors, but came no closer to an agreement.
Banks fear outflow of savings to stablecoins
The conversation in the Diplomatic Reception Room revolved almost entirely around stablecoins. These are crypto coins that are linked to, for example, the dollar. A hot topic is whether providers of these digital coins can offer users a form of return, such as ‘yield’ or ‘rewards’.
This is a standard service for crypto companies such as Circle and Ripple. However, banks fear that consumers will withdraw massive savings from bank accounts to seek returns from these alternatives.
“This could impact our role in providing credit to households and small businesses,” representatives of the American Bankers Association and others warned in a joint statement.
Trump is putting pressure
The White House said a compromise must be reached quickly. Patrick Witt, Trump’s crypto advisor, instructed both camps to come up with workable proposals this month. The message was clear: there is no time to lose.
Yet no concessions were made during the consultation. Afterwards, the crypto sector sounded more hopeful than the banks. Cody Carbone of lobby group The Digital Chamber called it “exactly the progress needed to resolve one of the biggest blockages in the legislative process.”
Also present were Coinbase, Circle, Crypto.com, the Crypto Council for Innovation and Ripple.
The law is hanging by a thread
The Clarity Act was passed in the House of Representatives last year, but recently failed in a Senate committee. In the next committee, which deals with banking matters, the contrasts are even sharper.
Not only banks are critical, Democratic senators also want stricter rules against money laundering, a fully appointed supervisor and clear ethical rules for civil servants with crypto interests.
The latter demand became topical through an article in The Wall Street Journal. It revealed that a senior official from the United Arab Emirates allegedly bought almost half of World Liberty Financial, a company with ties to Trump.
In addition, the American government is partly at a standstill due to a budget conflict in Congress, which further delays the progress of the law. If there is this
Source: https://newsbit.nl/trump-wil-crypto-wet-redden-maar-overleg-met-banken-en-stablecoin-bedrijven-loopt-vast/
