Negotiations on the long-debated crypto market structure bill, known as the CLARITY Act, appear to be moving forward after a third round of negotiations at the White House on Thursday, although a final deal has not yet been reached.
White House Takes Lead in Crypto Negotiations
Patrick Witt, executive director of the President’s Council of Advisors on Digital Assets, described the meeting as “a big step forward” in a statement. job on the social media platform X (formerly Twitter). “We are close,” Witt wrote, adding that if both sides continue to negotiate in good faith, he expects the deadline to be met.
Additional details about the latest session were reported by Crypto In America reporter Eleanor Terrett. According to sources present at the meeting, the meeting was smaller than the previous week’s session and included representatives from Coinbase and Ripple.
No bank executives participated directly. Instead, the banking industry was represented by trade associations, including the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America.
Terrett noted that, unlike previous sessions where industry groups largely guided the debate, this time the White House played a more assertive role. Witt reportedly presented a proposed piece of legislation that became the centerpiece of the conversation.
The proposed text responds to concerns raised by banks in a document released last week entitled “Return and Interest Prohibition Principles.” While acknowledging these objections, the draft also clarifies that any restrictions on rewards would be limited in scope.
One of the key points to remember is that the yield on unused revenue stablecoin balances – a central goal for many crypto companies – is effectively irrelevant. The debate has been limited to whether companies can offer rewards tied to specific activities rather than just account balances.
Daily penalties proposed in the draft
Bank resistance may be driven more by competitive pressures than fears of large-scale deposit flight, which was previously seen as the main concern, according to a crypto industry insider.
A banking industry source said their camp was still arguing for the inclusion of a formal system study of deposit outflows in the bill. Such a study would analyze how the growth of payments-focused stablecoins could affect traditional bank deposits over time.
This banking source expressed optimism about a new anti-avoidance provision proposed in the project. The bill would grant the Securities and Exchange Commission (SEC), the Treasury Department, and the Commodity Futures Trading Commission (CFTC) the authority to ensure compliance with the yield ban on unused balances.
Civil penalties could reach $500,000 per violation per day, underscoring the seriousness of the proposed enforcement framework.
Terrett further revealed in his report that the next phase would involve banking trade groups updating their members on the latest developments in order to assess whether there is flexibility to allow certain forms of stable rewards.
Discussions are expected to continue in the coming days. A source close to the negotiations said meeting the end-of-month deadline remained realistic, suggesting that while differences persist, momentum toward compromise is building.
Featured image from OpenArt, chart from TradingView.com
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