The long-delayed U.S. crypto market structure legislation is facing renewed momentum as digital asset companies introduce new compromise proposals aimed at easing concerns from lawmakers and traditional banks. With Senate negotiations stalled, the focus has shifted to stablecoins and their potential impact on the banking system.
Stablecoin Yield Debate Slows Senate Progress
At the center of the impasse is whether stablecoin issuers should be allowed to offer yield-bearing products. Banking groups argue that such features could divert deposits away from traditional savings accounts, while crypto advocates say the fears are overstated and unsupported by evidence. Although the bill has already passed the House of Representatives, disagreements in the Senate have prevented it from advancing further.
Recent discussions between banking and crypto stakeholders ended without a deal, but Senate leadership has indicated that talks are ongoing. Some lawmakers argue that stablecoin rewards can exist if issuers are clearly distinguished from banks and regulated accordingly. While no final agreement has been reached, both sides remain engaged.
Senate Banking Committee Chairman Tim Scott told Fox News on Wednesday;
To move negotiations forward, crypto companies are reportedly proposing measures that would integrate community banks more deeply into the stablecoin ecosystem. These ideas include requiring stablecoin issuers to hold reserves at community banks and enabling banks to issue their own stablecoins through partnerships with crypto firms. Supporters believe these steps could strengthen local banking institutions rather than undermine them.
The Senate must still reconcile differing committee versions of the bill and secure bipartisan support to pass it. Aligning these proposals could determine whether comprehensive crypto regulation finally reaches the president’s desk in 2026.
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