WASHINGTON–A bipartisan pair of senators has reached a long-awaited compromise on a key provision in legislation to regulate the cryptocurrency industry, though significant uncertainty remains over whether the measure can become law this year, according to analysts.
Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) unveiled an agreement late Friday addressing so-called “stablecoin rewards,” a contentious issue that had threatened to derail broader legislation known as the CLARITY Act, as the CU Daily has previously reported.
Under the proposal, crypto firms would be barred from offering yields on stablecoins—digital tokens typically pegged to the U.S. dollar—that resemble interest paid on bank deposits. However, the compromise would allow companies to provide “rewards” tied to certain customer activities, with regulators expected to define those parameters later, according to Barron’s.
Financial institutions have been pushing for restrictions on stablecoin yields, arguing such programs could siphon deposits away from traditional financial institutions.
Big Gains for Some
The issue has been particularly significant for firms such as Coinbase Global, which operates one of the largest stablecoin rewards programs, offering yields of about 3.5% to some users, according to Barron’s. The publication said stablecoins have become an increasingly important revenue source for the company amid declining trading activity, as rewards encourage customers to hold digital assets that can serve as entry points into broader crypto trading.
Coinbase declined to comment directly to Barron’s, instead pointing to social media posts by executives. Chief Legal Officer Paul Grewal wrote that while the company did not believe legislative changes were necessary, it supports moving the bill forward, Barron’s reported.
The compromise could help clear a major obstacle for the broader bill, which would shift much of crypto market oversight to the Commodity Futures Trading Commission, a longstanding priority for the digital asset industry, Barron’s reported.
Multiple Hurdles
Still, the legislation faces multiple hurdles. Barron’s reported that some Democrats are seeking provisions to prevent the family of President Donald Trump from profiting from crypto-related ventures, a proposal the White House views as unacceptable. The White House did not immediately respond to a request for comment, according to the publication.
Additional concerns include potential changes sought by Tillis to address law enforcement issues tied to the bill, Barron’s said.
Even if those issues are resolved, the measure would need at least 60 votes to pass the Senate, with early signals likely to come from Democratic support in the Senate Banking Committee, Barron’s reported.
Timing may be the biggest challenge. As the CU Daily has also been reporting, Congress faces a crowded legislative calendar and that lawmakers will soon shift focus to campaigning ahead of the November midterm elections. The bill would also need approval from the House of Representatives, and if Democrats regain control of that chamber, they could delay action until 2027.
