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Regulation of cryptocurrency markets in the US is once again rising to the top of the political agenda. Fox Business reporter Eleanor Terrett announced that Democrats in the Senate are planning a closed-door meeting tomorrow to discuss a bill concerning the structure of the cryptocurrency market.
According to two sources close to the matter, this meeting will be the first formal discussion among Democratic members of the Senate Banking Committee since the Republican side postponed the markup process on the bill last month.
The bill concerning the structure of the cryptocurrency market is stalled, particularly due to disagreements over how to regulate interest and similar rewards paid on stablecoins. The banking sector is pushing for the addition of a provision explicitly prohibiting the payment of interest or rewards to stablecoin holders. Banks argue that such practices could drive depositors away from the traditional banking system and threaten financial stability by leading to significant outflows from secured credit institutions.
Crypto companies, however, argue that interest and reward mechanisms are critical for acquiring new users. Industry representatives state that banning these practices would harm competition and hinder the development of innovative financial products. This difference of opinion between the parties has not been resolved despite months of negotiations.
Yesterday’s meeting at the White House also aimed to find common ground between the parties. The meeting was convened amid growing objections after the Senate Banking Committee delayed the bill due to a lack of sufficient support. However, according to a source who attended the meeting and requested anonymity, while the discussions were described as “constructive,” no concrete agreement was reached.
The Democrats’ closed-door session is expected to be decisive in determining whether they can secure the necessary political support to move the bill to the Senate floor.
*This is not investment advice.
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