Crypto Companies Offer Bank-Friendly Concessions Amid Stablecoin Disputes Holding Up Key Crypto Legislation

Some US crypto companies have put forward new compromises aimed at easing tensions with banks over stablecoin regulation, according to a recent Bloomberg report. Despite these efforts, the parties have not yet reached a formal agreement.

The proposals come at a time when the US crypto market structure faces growing pessimism, following the White House’s failure to resolve a persistent impasse over the “yield versus rewards” structure of stablecoins during a high-level meeting on Monday.

The meeting included representatives from major exchanges, industry groups, and Wall Street bankers. While not all crypto firms offered concessions, several suggested giving banks a more direct role in the stablecoin ecosystem.

Some proposals suggest issuing bank-backed tokens through partnerships. Others recommend that banks hold stablecoin reserves. Additional measures aim to better integrate traditional financial institutions into the crypto infrastructure.

Some proposals call for bank-backed tokens via partnerships. Others suggest banks hold stablecoin reserves. Additional steps aim to integrate traditional banks into crypto infrastructure.
If adopted, these measures could help bridge the gap between regulators, banks, and the rapidly evolving crypto industry.

Renewed Optimism as Crypto Firms Seek to Keep Market Structure Bill Moving

Recent reports indicate that crypto companies are actively exploring ways to maintain momentum for the stalled market structure legislation. One notable suggestion includes requiring stablecoin issuers to deposit a portion of their tokens with community banks.

This approach aims to increase smaller banks’ participation in the crypto ecosystem. It also provides safeguards for customers and investors.

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Mike Cahill, CEO of Web3 infrastructure firm Douro Labs and an early contributor to Pyth Network, told Cryptonews, “Advancing market structure legislation this quickly suggests there’s broad recognition that crypto markets have outgrown regulatory ambiguity. That doesn’t mean the hard questions are fully resolved, but it does show momentum toward treating these markets as permanent components of our financial system.”

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Senator Tim Scott, chairman of the Senate Banking Committee, emphasized that such compromises could “keep innovation here in America” while protecting consumers and community banks. He noted that allowing innovation and competition could help lower costs and broaden access to financial services.

On the legislative side, Senate Democrats held a closed-door meeting on crypto market structure this week—the first member-level meeting since the Senate Banking Committee postponed its markup last month. According to crypto journalist Eleanor Terrett, the session was “positive” and “arguably the most productive Democratic meeting to date.”

Senate Majority Leader Chuck Schumer emphasized the need for ongoing engagement with industry stakeholders. He also urged lawmakers to keep up the momentum to advance the bill.

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Overall, while the stablecoin dispute remains unresolved, the combination of new concessions from crypto firms and renewed legislative focus has injected cautious optimism into the US crypto market. Observers see these developments as a critical step toward integrating crypto markets into the broader financial system while balancing innovation with regulatory safeguards.

Conclusion:

Ongoing stablecoin disputes have temporarily stalled key crypto legislation in the US. Recent proposals from crypto firms offer a potential path forward. These proposals suggest new roles for banks, such as holding stablecoin reserves or issuing bank-backed tokens. The goal is to address community bank concerns, create new revenue opportunities, and maintain innovation in the crypto ecosystem. Closed-door meetings among Senate Democrats and bipartisan support indicate cautious optimism. While challenges remain, momentum is building to integrate crypto markets into the broader financial system.