Some crypto firms have proposed giving neighborhood banks a much bigger stablecoin function as Senate negotiations stall over the contentious market construction invoice.
Crypto companies are reportedly floating concessions relating to stablecoin yields in an attempt to unfreeze the delayed crypto market structure bill.
The legislation passed the House but has stalled in the Senate as negotiations continue over whether stablecoin issuers should be allowed to offer yields, with banks arguing it will compete with and take money away from traditional savings accounts.
Anonymous sources told Bloomberg that crypto firms are now making new proposals, such as giving community banks a bigger role in the stablecoin system, to ease the bill through the Senate.
Other proposed compromises include requiring stablecoin issuers to hold reserves at community banks and helping community banks issue their own stablecoins through partnerships.
No deposit flight, says Senator
A White House meeting on Monday between crypto and banking groups ended without agreement.
Senate Banking Committee Chairman Tim Scott told Fox News on Wednesday that allowing crypto firms to pay rewards is a good thing, but they cannot advertise as if they were a bank.
Related: Banks’ stablecoin concerns are ‘unsubstantiated myths’: Professor
The bottom line is that “there will not be a deposit flight. We’re going to sit down with consumer banks, hopefully next week again, and have this conversation,” he said.
“The good news is that both sides remain at the table […] we’re going to beat these hurdles and guarantee that America is the crypto capital of the world.”
Invoice nonetheless wants Senate approval
The US Senate Agriculture Committee launched a Republican draft of the market construction invoice in January, but it surely didn’t have the help of the Democrats.
Lawmakers held a markup session on Jan. 29, ensuing within the invoice advancing from the Agriculture Committee, however to totally cross and in the end advance to President Trump for approval, the invoice will want help from at the least seven Democrats within the full Senate.
The Senate Banking Committee’s markup proposes a stricter model of the invoice, and each have to be aligned earlier than it proceeds.
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