The banking industry should not be threatened by crypto companies offering stablecoin yield to customers, and both sides must compromise on the issue, according to White House crypto adviser Patrick Witt.
Witt said it was “unfortunate” that the issue of stablecoin yield has become a major point of contention between the crypto industry and banks, adding that crypto service providers sharing yield with customers does not threaten the banking industry’s business model or market share. He told Yahoo Finance:
“They can also offer stablecoin products to their customers, just the same as crypto. This is not an unfair advantage in either way, and many banks are now applying for OCC bank charters themselves to start offering bank-like products to their customers.
In the future, I don't think this is going to be an issue,” he continued, adding, “I think they're going to find opportunities to use these products and leverage them and offer new products to their customers and expand their businesses.”
The ability of crypto service providers and platforms to offer rewards to customers who hold stablecoins has emerged as one of the most significant pain points for the industry, contributing to delays in passing the CLARITY market structure bill.
Related: White House crypto bill talks ‘productive,’ but no deal yet
Time is running out on passing the CLARITY Act, Witt and others warn
The proposed CLARITY Act establishes clear regulatory jurisdiction over crypto markets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and also creates an asset taxonomy for cryptocurrencies.
However, government officials and industry executives have warned that the looming 2026 US midterm elections could derail efforts to pass it into law and threaten to roll back crypto regulations established by the administration of US President Donald Trump.
“I think if the Democrats were to take the House, which is far from my best case, then the prospects of getting a deal done will just fall apart,” US Treasury Secretary Scott Bessent said on Friday.
“There's a window here. The window is still open, but it is rapidly closing,” Witt said, adding that the White House Crypto Council is aiming to have the CLARITY Act signed into law before the midterms “take all of the oxygen out of the room.”
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