White House crypto adviser Patrick Witt has reportedly redirected discussions between crypto firms and banking lobby groups toward a proposed bill that would permit stablecoin rewards linked directly to transaction activity, signalling a potential shift in Washington’s approach to digital asset regulation.
Policy focus narrows on incentive-based stablecoins
According to people familiar with the talks, Witt encouraged stakeholders to concentrate on legislation that would allow stablecoin issuers to offer transaction-based rewards — a mechanism designed to stimulate usage while maintaining regulatory oversight. The move reflects growing interest within the administration in practical frameworks that integrate digital assets into everyday payments, rather than treating crypto purely as a speculative investment class.
The proposal centres on enabling users to earn small incentives when transacting with compliant stablecoins, potentially accelerating adoption across retail and business payments. Supporters argue that such rewards could improve liquidity, strengthen network effects and position regulated stablecoins as credible alternatives to traditional payment rails.
Banks and crypto firms seek common ground
The renewed focus comes after months of fragmented lobbying efforts, with banks pushing for tighter safeguards and crypto companies advocating for clearer operating rules. By steering conversations toward a specific legislative outcome, Witt appears to be attempting to bridge that divide.
Bank representatives have reportedly emphasised the need for strong consumer protections, capital requirements and transparency around reserve holdings. Crypto advocates, meanwhile, are pressing for regulatory clarity that allows innovation to proceed without constant legal uncertainty. The stablecoin rewards concept is viewed by some as a compromise: encouraging digital payment adoption while keeping activity within a supervised financial perimeter.
Stablecoins move closer to mainstream payments
Stablecoins, typically pegged to fiat currencies such as the US dollar, have become a cornerstone of digital finance, facilitating fast, low-cost transfers across borders. Allowing rewards tied to transaction activity could further embed them into everyday commerce, particularly for remittances, online retail and business-to-business settlements.
Proponents say the model mirrors loyalty schemes already common in traditional finance, but with blockchain-based transparency and programmability. Critics caution, however, that incentives could encourage excessive transaction volume or obscure underlying risks if not carefully regulated.
Legislative implications and regulatory balance
Any bill enabling stablecoin rewards would need to navigate complex regulatory terrain, involving banking oversight, securities law and consumer protection frameworks. Lawmakers are expected to scrutinise how rewards are funded, how reserves are managed and how issuers ensure compliance with anti-money laundering standards.
For the White House, the effort underscores a broader strategy to bring crypto activity into regulated channels rather than pushing it offshore. By anchoring innovation within US financial law, officials hope to maintain competitiveness while reducing systemic risk.
A signal of evolving federal strategy
Witt’s reported intervention suggests a more targeted federal approach to crypto policy, prioritising practical use cases over abstract regulatory debates. If successful, the initiative could mark a step toward integrating digital assets into the mainstream financial system, while preserving oversight mechanisms familiar to banks and regulators alike.
Whether Congress embraces the proposal remains uncertain, but the shift in lobbying focus indicates momentum toward a clearer framework for stablecoins — one that blends innovation with institutional guardrails.
Newshub Editorial in North America – 20 February 2026
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