White House to intervene in legislative deadlock over cryptocurrency, invites Coinbase (COIN.US) and banking industry representatives to discuss stablecoin reward controversy.

Bank of America Corp. and lobbying groups and executives from the cryptocurrency industry plan to hold a meeting at the White House next Monday, as a controversial digital asset legislation is sparking intense debate. The proposed meeting stems from Coinbase CEO Brian Armstrong's public withdrawal of support for a core draft of a highly anticipated cryptocurrency market structure reform bill. According to sources familiar with the matter, despite nearly two weeks of ongoing negotiations, parties have not yet reached a compromise that could push the restart of the bill draft. Another source indicated that if a consensus is not reached by then, the White House meeting next week may be postponed. One source mentioned that representatives from Coinbase will be attending the White House meeting. At this time, neither Coinbase nor the White House have responded immediately to requests for comment. In mid-January of this year, Coinbase officially withdrew its support for the version of the bill drafted by the Senate Banking Committee. Hours later, committee chairman Tim Scott announced that the highly anticipated bill debate would be delayed, and a new hearing date was not disclosed. Meanwhile, the Senate Agriculture Committee is set to debate and consider related amendments to its version of the bill draft on Thursday. Coinbase has opposed a legislative demand from banking lobbying groups that seek to include provisions in the bill that would limit cryptocurrency exchanges' ability to provide incentives for users to hold assets. The banking industry believes that these asset-holding incentives would divert customers' deposits from banks; while cryptocurrency exchanges argue that this is just a way to provide more attractive services to users. The blockchain advocacy group Blockchain Association expressed gratitude for the White House convening industry stakeholders and pushing for a compromise on stablecoin holding reward issues. The cryptocurrency industry's political action committee, Fairshake, also announced on Wednesday that it has been increasing its political influence: with the upcoming midterm elections approaching, the committee's fundraising reserves exceed $193 million, primarily from large donations from Coinbase, Ripple, and venture capital firm a16z. Fairshake stated that the funds will be used to continue opposing politicians who hold an "anti-cryptocurrency" stance. This move also aligns with Armstrong's earlier social media posts. Just a few hours before withdrawing support for the Senate Banking Committee's bill draft, Armstrong posted on January 14th on X platform: "Reminder, @standwithcrypto will be rating this weeks Senate deliberations on this bill." Reportedly, this initiative was initially launched by Coinbase in 2023. He also added at the time, "We will then see which senators are sacrificing the rights of the American people for the benefit of banks and which senators are truly standing on the side of consumers, supporting users acquiring asset-holding rewards."