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Wall Street banks and the crypto industry left a White House meeting without a deal and then went home and wrote dueling manifestos. The standoff over whether stablecoins can offer yield has now produced competing principles papers from both camps, hardening a divide that threatens to kill the Digital Asset Market Clarity Act before it ever reaches a Senate floor vote.
At the center of the dispute is a core question shaping the crypto market structure bill: should stablecoin users be allowed to earn any form of yield or reward? Bank lobbyists argue the answer must be no. Crypto advocates counter that a blanket prohibition would undermine decentralized finance (DeFi), innovation, and consumer choice.
The impasse hardened after a meeting at the White House, where senior Wall Street bankers and crypto executives were urged by officials in Donald Trump’s administration to find common ground. Instead, bankers circulated a one-page document titled “Yield and Interest Prohibition Principles,” insisting that any form of stablecoin yield threatens the deposit-based foundation of the U.S. banking system.
From the banks’ perspective, allowing yield on stablecoins would create functional substitutes for savings accounts—without the same regulatory burdens. That risk, they argue, could pull deposits out of traditional banks and destabilize credit creation. As a result, bankers are pushing for the crypto market structure bill to include a total ban on stablecoin yield.
The crypto sector has now answered in kind. The Digital Chamber circulated its own principles paper on Friday, pushing back against what it calls an overly broad prohibition. The document, obtained defends language in the Senate Banking Committee’s draft of the crypto market structure bill that allows limited rewards in specific scenarios.
“We want to make the case known for policymakers that we do think this is a compromise,” said Cody Carbone, CEO of the Digital Chamber, in an interview.
Carbone emphasized that the crypto industry is willing to concede ground by giving up rewards that resemble interest on idle stablecoin holdings—products that look too much like bank savings accounts. However, he said the crypto market structure bill should still protect rewards tied to activity, such as transactions, liquidity provision, or ecosystem participation.
A key tension shaping the crypto market structure bill is the existence of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, passed last year. That law already provides a framework under which certain stablecoin products can operate.
According to Carbone, the banking industry’s push to eliminate rewards entirely amounts to dialing back the GENIUS Act through edits in the pending Digital Asset Market Clarity Act. From the crypto industry’s view, agreeing to scrap yield on static holdings is already a meaningful concession under existing law.
“If they don’t negotiate, then the status quo is that just rewards continue as-is,” Carbone said. “If they do nothing and they continue to say, ‘We just want a blanket prohibition,’ this goes nowhere.”
That warning underscores the stakes for the crypto market structure bill, which has already seen progress stall after an eleventh-hour disagreement derailed a Senate Banking Committee hearing last month.
The Digital Chamber’s principles highlight two reward categories it wants preserved in the crypto market structure bill: rewards for providing liquidity and incentives that foster ecosystem participation. Both are central to how decentralized finance protocols function.
Without such incentives, crypto advocates argue, DeFi markets would struggle to operate efficiently, reducing liquidity and pushing innovation offshore. The group maintains that these rewards are fundamentally different from bank interest and should not be regulated as such.
Carbone also noted that the Digital Chamber is uniquely positioned to act as a mediator, given that its membership includes both crypto-native firms and traditional financial institutions.
“Hopefully we can be the voice or the middle man who helps drive this conversation once again,” he said.
According to people familiar with the talks, the White House has called for a compromise on the crypto market structure bill by the end of the month. So far, however, the banking side has shown little movement despite repeated meetings.
Trump crypto adviser Patrick Witt told Yahoo Finance on Friday that another meeting could take place next week.
“We’re working hard to address the issues that were raised,” Witt said, adding that he has encouraged both sides to bend on details.
Witt also downplayed the centrality of the stablecoin yield debate, arguing that the crypto market structure bill is being sidetracked by an issue better handled elsewhere.
“It’s unfortunate that this has become such a big issue,” he said, noting that stablecoins were more squarely addressed by the GENIUS Act. “Let’s use a scalpel here to address this narrow issue of idle yield.”
The fate of the crypto market structure bill now depends on how the Senate committees proceed. The Senate Agriculture Committee has already passed its version of the Clarity Act, focusing primarily on commodities oversight. The Senate Banking Committee’s version, by contrast, addresses securities and stablecoins.
If the banking panel advances its draft along partisan lines, the crypto market structure bill could struggle to clear the full Senate, where a 60-vote threshold will require substantial Democratic support. That reality is adding pressure on negotiators to find a middle ground that preserves innovation while addressing systemic risk concerns.
For now, the crypto market structure bill remains stuck between two powerful constituencies. Whether compromise emerges—or the stalemate hardens—will determine not only the future of stablecoin rewards, but the broader direction of U.S. crypto regulation.
