US Crypto Framework Bill Stalls as Banks Reject White House Stablecoin Compromise

US negotiations on a cryptocurrency regulatory framework have stalled after banks rejected a White House compromise that would allow stablecoin issuers to offer yield products in limited cases such as peer-to-peer payments while banning returns on idle balances, Reuters reports. Crypto firms accepted the proposal, but banks are pushing for tighter restrictions, warning the measures could trigger deposit outflows, with Standard Chartered estimating stablecoins could drain about $500 billion in deposits from the US banking system by end-2028. Donald Trump wrote on Truth Social he would not allow banks to "undermine our strong crypto agenda," while industry participants including Coinbase, Ripple and the Blockchain Association have joined the talks, and Blockchain Association CEO Summer Mersinger said the path to a viable deal is clearer than a month ago. The bill still must secure backing from at least seven Democratic senators, reconcile with the Senate Agriculture Committee's version, address calls from some Democrats for a ban on elected officials profiting from crypto businesses and for tougher anti-money laundering rules, and compete with other priorities such as housing reforms, with Adrian Wall of the Digital Sovereignty Alliance saying that if it is not signed by July, the midterm elections will close the window for passage.