As U.S. senators prepare to pass major cryptocurrency market structure legislation this week, industry leaders are considering proposed changes that could impact whether stablecoin holders will be able to earn interest and rewards.
According to the amended draft law on transparency of the digital assets market published on Monday, the draft law states that “the digital asset service provider may not pay interest or profits in any form […] solely in connection with holding a payment stablecoin,” effectively preventing passive, deposit-like returns from the stablecoin balance.
The project leaves room for structured reward mechanisms, as stablecoin rewards will not be prohibited in certain circumstances, including “providing liquidity or collateral” or “governance, validation, staking or other participation in the ecosystem.”
The project signaled that lawmakers could respond to criticism calling for clearer rules on interest and rewards for stablecoins. However, some banking groups lobbied against such stablecoin rewards in the GENIUS Act, which was signed into law in July.
According to Coin Bureau co-founder Nic Puckrin, Senate lawmakers were trying to strike a balance between industry demands for yield flexibility and banks’ resistance to competition at the deposit level.
“The Senate compromise on stablecoin profitability in the proposed amendments to the Cryptocurrency Market Structure Act is a clear signal that the authorities are committed to ensuring that stablecoins remain attractive to end-users, while reassuring banks that have lobbied heavily against such rewards,” Puckrin said in a statement shared with Cointelegraph, adding on the possibility of the bill passing:
“But no matter which way tokens go, it is clear that stablecoins will remain competitive with bank deposits. Short of an outright ban on any form of rewards, there is little to stop this, and this is a new reality that banks will have to reckon with.”
Lawmakers on the Banking Committee will approve the bill on Thursday, which could potentially result in it being voted on in the Senate. However, the Senate Committee on Agriculture announced on Monday that it would not consider its version of the bill until the end of January.
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“If the bill does not pass in either committee, then the market structure will likely be dead for this session,” Eli Cohen, Centrifuge’s chief legal officer, said in a statement shared with Cointelegraph. “If the bills are passed on a GOP-line vote, there will still be time to win over Democrats before the consolidated bill goes to the full Senate floor for a vote.”
Concerns about midterm elections, DeFi and conflicts of interest
Stablecoin regulations, while vital to many companies and banks, are not the only potential obstacle to the bill. At least two Senate Democrats have demanded that the CLARITY Act include protections to prevent public officials, including U.S. presidents, from profiting from investments in digital asset companies.
Some experts are also concerned about the upcoming US mid-term elections in November, which could gain support for the bill. TD Cowen’s Washington Research Group speculated that the bill is more likely to pass in 2027 as Democrats consider whether control of Congress could shift from Republicans after the midterms.
U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins said on Monday that he expects Trump to sign the bill by the end of 2026. According to the latest drafts, the bill would create a regulatory framework for the Commodity Futures Trading Commission, particularly in overseeing digital assets.
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