Amid ongoing anticipation for new cryptocurrency regulations, uncertainty persists over the timetable for the US Senate’s Crypto Market Structure Bill. Republican Senator Thom Tillis, a key figure on the Senate Banking Committee, recently stated he does not expect a committee session in April for a vote or further revisions to the bill. With negotiations deadlocked and industry tensions rising, progress on the legislation remains frozen.
Stablecoin reward policies spark division
Recently, talks between Senator Tillis and Maryland Democrat Angela Alsobrooks drew attention as they sought to resolve disputes over stablecoin reward schemes. The latest debates center around how stablecoin issuers and external platforms, such as Coinbase, handle rewards and yields. While the GENIUS stablecoin bill, approved in July, bars stablecoin issuers from directly paying interest, it does not prevent outside platforms from offering rewards. Banking sector representatives argue that this loophole risks draining deposits from traditional banks, potentially weakening local financial institutions.
Many cryptocurrency companies counter that restricting rewards would undermine innovation. According to committee insiders, the latest draft prohibits offering rewards on idle stablecoin balances, but it preserves returns tied to active transactions. These stipulations appear unlikely to be revised further as the legislative process drags on.
The knotty issue in crypto policy is stablecoin rewards. Industry leaders warn that banning these incentives would halt innovation, while bank lobbyists claim it threatens traditional finance.
Legislative delays and mounting impatience
The bill’s slow progress has fueled pressure in both the Senate and the crypto community. While one version passed the House nearly a year ago and advanced through the agriculture committee despite bipartisan differences, final approval requires the banking committee’s consent and reconciliation with the House version.
Senator Cynthia Lummis had indicated during March’s Washington Blockchain Summit that the committee aimed for an April vote. However, Senator Bernie Moreno has since warned that if the bill stalls much longer, significant digital asset legislation could be off the table for the foreseeable future. According to committee chair Tim Scott, there is a chance the issue could return to the agenda in May.
The proposed legislation seeks to clarify which digital assets qualify as securities or commodities, which regulatory agency would have oversight, and to what extent transparency requirements would apply. Over the past year, lobbying and disputes over these details have repeatedly slowed the bill’s advance.
Industry steps up lobbying efforts
Last week, banking sector representatives presented their concerns about the final draft to other senators on the committee. Meanwhile, the committee temporarily shifted focus to the confirmation hearings for Federal Reserve chair candidate Kevin Warsh, pushing further debate on the crypto bill into the background.
Cody Carbone, CEO of The Digital Chamber, recently sent a letter to key senators highlighting that a legal framework for digital asset markets is essential for maintaining the US’s leadership in innovative finance. Carbone stressed that millions of Americans now engaging in digital asset markets are looking for clear regulations.
Carbone emphasized, “Providing legal clarity is essential for the 70 million Americans who choose digital assets and for ensuring the US strengthens its leadership in next-generation financial technology.”
