- Deaton blasts banks amid escalating CLARITY Act stablecoin fight
- White House talks shift focus from yields to enforcement
- Crypto firms and banks clash over stablecoin reward limits
Debate over stablecoin regulation intensified after new details surfaced from ongoing White House negotiations surrounding the CLARITY Act, drawing sharp reactions from prominent Ripple advocate John Deaton, who openly criticized major banking groups as discussions entered a decisive phase involving crypto companies, lawmakers, and powerful financial institutions.
Representatives from Ripple, Coinbase, a16z, and the Blockchain Association participated in the meeting, while traditional finance was represented by the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America, highlighting the direct institutional divide shaping the conversation around stablecoin policy and financial oversight.
According to journalist Eleanor Terrett, crypto participants described the meeting as productive and constructive, signaling that despite deep disagreements over stablecoin rewards and compliance frameworks, both sides acknowledged progress in narrowing key differences that have stalled earlier drafts of the legislation.
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Stablecoin Yield Debate Shifts Toward Enforcement and Activity Based Rewards
Although crypto firms initially pushed to preserve the ability to offer yield on idle stablecoin balances, that demand now appears to have been removed from the core agenda, as negotiators redirected their focus toward determining whether platforms may provide rewards tied to defined user activities rather than passive holdings.
At the same time, banking representatives have continued advocating for strict anti evasion measures, including proposed penalties that could reach $500,000 per day, with enforcement authority potentially shared among the SEC, the Treasury Department, and the CFTC, thereby expanding the regulatory scope beyond simple yield prohibitions.
Consequently, the negotiations have evolved from a narrow debate over stablecoin interest payments into a broader discussion about compliance standards, supervisory authority, and the limits of financial incentives within digital asset markets.
Deaton Casts Banking Push as Resistance to Financial Competition
Deaton responded forcefully to the reported developments, and according to his statement on X, banks have historically positioned themselves against the financial interests of ordinary Americans, framing the current effort to restrict stablecoin rewards as part of a longstanding pattern of resistance to competitive financial alternatives.
His remarks underscore the ideological tension driving the negotiations, as lawmakers attempt to balance innovation, consumer protection, and systemic stability while shaping the final provisions of the CLARITY Act, which could ultimately determine how stablecoins operate within the evolving United States regulatory framework.
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