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Reading: Senate Clashes Over Stablecoin Rewards Put Crypto Legislation In Limbo
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COINTURK NEWS > Cryptocurrency Law > Senate Clashes Over Stablecoin Rewards Put Crypto Legislation In Limbo
Cryptocurrency Law

Senate Clashes Over Stablecoin Rewards Put Crypto Legislation In Limbo

In Brief

  • Senators are debating stablecoin rewards as the Clarity Act moves through Congress.

  • Negotiations are focused on tying stablecoin rewards to active transaction activity.

  • Passage of the bill remains uncertain due to political divisions and time constraints.
Ömer Ergin
Ömer Ergin 2 months ago
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Senators and industry leaders are working to move the Digital Asset Market Clarity Act through the Senate, facing ongoing disputes that have pitted traditional financial institutions against digital asset advocates. In remarks Tuesday at an American Bankers Association event in Washington, Senator Angela Alsobrooks, who serves on the Senate Banking Committee, emphasized that consensus will demand compromise from all stakeholders.

Contents
Stablecoin Rewards Create TensionsNegotiated Compromise Emerges

Stablecoin Rewards Create Tensions

The heart of the standoff lies in provisions related to reward programs for holders of stablecoins. Senior bankers have objected to potential rules that allow digital asset firms to incentivize customers for holding stablecoins, citing fears of significant migration of deposits away from banks. The American Bankers Association, a major trade group that represents traditional lenders, has been actively lobbying to restrict or eliminate crypto-based rewards programs from the bill.

Negotiated Compromise Emerges

Senator Alsobrooks and Senator Thom Tillis are engaged in negotiations to define language that could satisfy both camps. The current proposal under review would prohibit rewards on idle stablecoin balances while permitting rewards tied to transactional activity, such as making purchases or crypto exchanges. This model seeks to prevent mass withdrawal of funds from banks by making stablecoin rewards less attractive as a substitute for typical savings deposits.

Alsobrooks expressed that the resulting policy will likely leave every side slightly dissatisfied in order to clear Congress. “I think I have to level set that all of us will probably walk away just a little bit unhappy,” she explained.

Jamie Dimon, chief executive at JPMorgan Chase, has communicated to lawmakers that banks may tolerate certain transaction-tied incentives. This perspective matches a compromise put forward by crypto companies during discussions with executive branch officials. The stablecoin issue has already prompted significant pushback from both crypto advocacy groups and leadership from established financial firms.

Senator Mike Rounds, another member of the Banking Committee, suggested that tying rewards to transaction volume rather than passive holdings could form a workable solution, though he refrained from endorsing a specific approach. Meanwhile, scheduled committee votes to advance the bill have repeatedly been delayed. Further action is now dependent on additional discussions, particularly between Tillis, Coinbase representatives, and national banking associations.

The Digital Asset Market Clarity Act aims to provide a legislative and regulatory framework for cryptocurrency markets and stablecoins. Both supporters and detractors are navigating a complex policymaking landscape defined by unresolved arguments on DeFi controls, federal agency leadership vacancies, and conflict-of-interest guidelines on crypto holdings by public officials.

If the bill clears the Banking Committee, it must be merged with a related package approved by the Senate Agriculture Committee before being considered by the full Senate. This step requires coordination among Democratic and Republican lawmakers, with Democratic Caucus members expressing reticence on several outstanding provisions.

Time is a critical factor as Congress faces a crowded schedule that includes foreign policy priorities and other legislative challenges. The Office of the Comptroller of the Currency has recently put forth regulatory proposals that follow last year’s GENIUS Act, addressing stablecoin industry standards and reinforcing the need for clear statutory rules. Meanwhile, industry leaders reported ongoing negotiations and have not ruled out contingency measures if committee markups are postponed further.

You can follow our news on Telegram, Facebook & Coinmarketcap & X
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.

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Ömer Ergin 11 March, 2026 - 11:58 am 11 March, 2026 - 11:58 am
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