U.S. Cryptocurrency Legislation Faces New Deadlock, Future Uncertain

Mars Finance News: U.S. cryptocurrency legislation negotiations have hit a new deadlock. The banking industry states it cannot support the White House’s proposed compromise, which allows stablecoin issuers to offer yield products in specific scenarios like peer-to-peer payments but prohibits earning on idle holdings. Crypto companies have accepted the compromise, but banks still want to strictly limit the scope of reward-eligible activities, fearing that related clauses could trigger deposit outflows. Standard Chartered estimates that by the end of 2028, stablecoins could drain about $500 billion in deposits from the U.S. banking system. Trump posted on Truth Social that he would not allow the banking sector to “destroy our strong crypto agenda.” Crypto industry players like Coinbase, Ripple, and Blockchain Association are involved in negotiations. Blockchain Association CEO Summer Mersinger said, “The path to a feasible agreement is clearer than it was a month ago.” The bill faces other challenges: it needs support from at least seven Democratic senators, some Democrats demand banning elected officials from profiting from crypto businesses, and others call for stricter anti-money laundering provisions. The bill also needs to be coordinated with the Senate Agriculture Committee version and compete for limited Senate schedule time alongside other bills like housing policy reform. Adrian Wall, Managing Director of Digital Sovereignty Alliance, stated that if the bill is not sent to the President for signature before July, the midterm elections will close the window for passage.