White House Crypto Advisor Fires Back At Bank CEOs In Stablecoin Rewards Clash

As the highly anticipated markup of the crypto market structure bill approaches, the White House’s top crypto advisor has slammed the banking industry’s CEOs amid efforts to reopen the stablecoin rewards debate.

Nichols affirmed that he was “reaching out to make every bank leader in this country aware of an urgent advocacy fight that requires your immediate engagement,” adding that he wants Congress to establish digital asset rules and responsible guardrails for the crypto industry.

“We believe the committee members may not be fully aware of the risks to the economy posed by the stablecoin loophole. Your immediate engagement can make a difference,” Nichols’ letter read.

For context, the latest version of the CLARITY Act prohibits any activity “economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit” on payment stablecoins.

Nonetheless, the text allows for payment of rewards tied to bona fide activities, including staking, transaction activity, or liquidity provision, aiming to promote a “buy and user” approach.

In an X post, Witt reacted to the recent letters, affirming that he had specifically requested that Nichols and other bank trade CEOs attend the White House’s meetings to mediate the stablecoin yield dispute, but that they refused.

Some reports at the time noted that no individual bank representatives attended the February meeting, but that the sector was represented through trade associations, including ABA, the Banking Policy Institute (BPI), and the Independent Community Bankers of America (ICBA).

“I guess the White House was beneath them?” the crypto advisor wrote on Monday. “In their defense, I wouldn’t want to have to defend their position in public either.”

“Still, the issue could resurface once the legislation reaches the Senate floor, where the banking groups may try to win over senators not on the Banking Committee,” Terret pointed out.