Some crypto companies are advocating for an increased role for community banks in the stablecoin market as discussions in the Senate regarding a market structure bill remain stagnant.

While the House has moved forward with related legislation, Senate negotiations have reached a standstill, particularly over the issue of whether stablecoin issuers may offer yields, a development that banks fear could divert funds from traditional savings.

Anonymous sources disclosed to Bloomberg that crypto entities are now suggesting measures, including:

1. Increasing the role of community banks in stablecoin operations, and 2. Requiring stablecoin issuers to maintain reserves at community banks.

No Agreement Reached at White House Meeting

A recent meeting in the White House among crypto and banking representatives concluded without reaching an agreement. Senator Tim Scott remarked to Fox News that while it’s beneficial for crypto firms to offer rewards, they should not promote themselves like banks.

“The good news is that both sides remain at the table […] we’re going to overcome those hurdles and make sure that America is the crypto capital of the world.”

Senator Scott assured that there would be no ‘deposit flight’ and indicated future discussions with consumer banks.

Path Forward for the Market Structure Bill

The Senate Agriculture Committee has previously released a Republican draft of the market structure bill that lacked bipartisan support. Lawmakers will need to align the stricter version proposed by the Senate Banking Committee and garner backing from at least seven Democrats to progress the bill to President Trump’s desk.

For further insights, you can refer to related articles on crypto regulations and stablecoin issues.