Ripple has secured a seat at the highest table in Washington.
On Monday afternoon, representatives from the blockchain payments company joined an elite group of crypto heavyweights and traditional banking lobbyists at the White House for a high-stakes summit on stablecoin regulation.
The two-hour closed-door meeting focused on one of the most contentious issues stalling current market structure legislation: stablecoin yield and rewards.
The guest list
The attendee list included some major representatives from crypto and (Ripple, Coinbase, Tether, Kraken, Crypto.com, Paxos, Circle, and PayPal) as well as banking and traditional finance heavyweights (Fidelity, Cantor Fitzgerald, SoFi, and so on).
According to reporter Eleanor Terrett, sources inside the room described the atmosphere as “constructive” with “positive vibes” and “no yelling”.
The discussion reportedly focused on the “risks and opportunities” of allowing stablecoin issuers to offer yield (interest) to holders.
Banks argue that unregulated stablecoin yield acts as a shadow banking product that siphons deposits from regulated lenders, while crypto firms argue that banning yield stifles innovation and consumer benefit.
Terrett noted that the issues were “framed so that both sides know where boundaries are.”
Despite the cordial tone, distinct friction remained in how the two sides approached the negotiation.
Brendan Pedersen, a reporter covering the intersection of finance and policy, noted a sharp contrast in strategy.
“Folks in the room of WH crypto-bank meeting have told me the two industries had very different approaches to initial negotiations. Crypto reps wanted to talk specific potential solutions on yield. Bank trade reps mostly avoided details, did not want to discuss discrete solutions,” he said.
Patrick Witt’s reaction
Patrick Witt, the Executive Director of the President’s Council of Advisors for Digital Assets, claims that there has been progress on several “seemingly intractable” policy issues.
Over the course of the past few months, we have achieved breakthroughs on several seemingly intractable policy issues. I am confident we will be able to resolve this one, too.
He is confident that the issue of stablecoin yields will eventually be resolved as well.