White House Pushes for February Deadline on Crypto Market Structure Bill: What’s To Expect?

The White House has ramped up efforts to resolve ongoing disputes over the Crypto Market Structure Bill, with the February deadline fast approaching.  

The crypto market is down -4.31% to $2.54T as BTC and other cryptocurrencies are struggling.

On Monday, President Donald Trump hosted a significant meeting at the Eisenhower Executive Office Building. It included the most important representatives of banks and crypto exchanges in the U.S., as well as industry organizations. 

The meeting was to solve the historical problems between these sectors and push the legislation before the month ends. However, deep disagreements persist, especially regarding the issue of stablecoin rewards.

Stablecoin Rewards at the Heart of Disputes

A major sticking point in the discussions remains stablecoins, digital currencies pegged to the U.S. dollar. The crypto industry is pushing for stablecoin issuers to be allowed to offer rewards, which they argue would help make these tokens more competitive.  

The banks, on the other hand, say that these rewards would encourage people to leave the conventional savings accounts, and this would upset their business model. The dispute is based on one of the provisions in last year’s GENIUS Act, which does not allow the issuers of stablecoins to offer interest on the storage of digital tokens. 

Critics however believe that there is a loophole where it would be possible to offer rewards through third parties. The new crypto market structure bill aims to address such a gap by some lawmakers.

All these debates have brought the push of the bill in the Senate to a halt. Latest senate banking committee versions of the bill have received vehement criticism by the crypto industry, especially the stablecoin rewards capped. 

Based on these restrictions, Coinbase pulled its support out of the bill. This led to the Senate Banking Committee markup being pushed off forever. The future of the bill is unpredictable at this point, and it will not be reviewed again.

The Push for a February Deadline

Despite the challenges, the White House remains determined to see the legislation move forward. The officials have indicated that they prefer having a tradeoff in terms of stablecoin yields by the close of February. 

According to Brian Gardner, a policy strategist at Stifel, the deadline is essential. He said that the limited timeframe, coupled with the midterm elections in November are keeping the chances of the bill going through this year low. 

There is still a lot to be determined, such as the disagreements concerning the split-up of responsibilities of regulatory activities between the SEC and CFTC. The future of the bill will consist of reaching a compromise on these issues.

The efforts to advance the bill in January underscored the fratricide between the Republicans and the Democrats. Senate Republicans have been keen on advancing the bill, but they have not had the bipartisan backing to do so. 

The interests of both parties should be taken into consideration in the final version of the bill. Then only can it have a chance of receiving sufficient support to pass.

White House Seeks Resolution in Crypto-Banking Dispute

The White House’s direct involvement underscores the growing importance of crypto regulation in U.S. policy. The Monday meeting, which was convened by the crypto council at the White House, involved major stakeholders of the banking industry and the crypto industry.

Although the session has been termed as constructive, there were no major agreements made. The meeting was chaired by Patrick Witt, the crypto advisor to the president, and he insisted that there should be a resolution before the end of February.

The future trend of digital assets in the U.S. financial system will be determined by the result of these discussions.