Watch Out Tomorrow: An Announcement May Come in the Cryptocurrency Development Everyone is Waiting For

The White House is holding a second meeting tomorrow to ease tensions between cryptocurrency companies and banks over stablecoin yield payments.

The meeting will not be attended by company CEOs, but rather senior policy officials from banks and crypto firms, as well as representatives from industry associations.

According to sources, major banks invited include Bank of America, JPMorgan, and Wells Fargo. Representatives from PNC Financial Services, Citigroup, and U.S. Bank may also have been invited. On the crypto side, Coinbase Chief Legal Officer Paul Grewal is expected to attend.

Cryptocurrency companies are demanding a more flexible framework for offering returns to users through the stablecoins they issue, while banks argue that this practice could create risks similar to deposit-taking activities and generate regulatory inequality. This is seen as a new front in the competition between traditional finance and the crypto sector.

Another important topic of discussion between the parties is the FED’s proposed “skinny” master account model. This model would grant eligible fintech companies limited access to the FED’s payment systems.

The 44 comment letters sent to the FED clearly revealed the divergence between sectors. While crypto companies generally approached the proposal positively, the banking sector adopted a cautious, and at times even negative, stance.

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Stablecoin issuer Circle argued that skinny accounts would “increase the overall resilience of the payment system.” The Blockchain Payments Consortium, which includes blockchain infrastructure providers such as Fireblocks, Polygon, Solana, and TON, stated that this model would “eliminate anti-competitive practices that negatively impact consumers and prevent risk from being concentrated around a few banks.”

However, some crypto companies found the proposal insufficient. Anchorage Digital described the move as a “positive development” but criticized the lack of direct access to the Fed’s automated clearing system (ACH), reserve balance holding, and interest earning opportunities.

The banking sector, however, argues that the regulatory framework for crypto companies is not yet mature enough. The American Bankers Association stated that many entities deemed suitable for payment processing “lack a long-term oversight history and are not subject to consistent federal security standards.”

The Colorado Bankers Association warned that such accounts “could open the door to an accelerated risk of fraud.”

Dennis Kelleher, a harsh critic of the cryptocurrency sector and CEO of Better Markets, described the proposal as “reckless favoritism towards the crypto industry” and argued that it would unnecessarily expand the Fed’s core mandate.

The Fed is expected to begin the rule-making process regarding skinny master accounts after evaluating the incoming comments. Fed Board Member Christopher Waller expressed hope that the regulation would be published in the fourth quarter of this year.

*This is not investment advice.

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