Paul Atkins

Stablecoin

Republican

would

As US senators prepare to mark up a major crypto market structure bill this week, industry leaders are weighing in on proposed changes that could shape whether stablecoin holders can earn interest and rewards.
According to an amended draft of the Digital Asset Market Clarity Act released on Monday, the bill <a href="https://www.banking.senate.gov/imo/media/doc/market_structure_draft.pdf" rel="noopener noreferrer nofollow" target="_blank">states</a> that “a digital asset service provider may not pay any form of interest or yield [...] solely in connection with the holding of a payment stablecoin,” effectively barring passive, deposit-like returns on stablecoin balances.
The draft leaves room for structured reward mechanisms, as stablecoin rewards would not be prohibited under certain circumstances, including “providing liquidity or collateral” or “governance, validation, staking, or other ecosystem participation.”
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 Source: <a href="https://www.banking.senate.gov/imo/media/doc/market_structure_draft.pdf" rel="noopener noreferrer nofollow" target="_blank">US Senate Banking Committee</a>
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The draft signaled that lawmakers could be responsive to criticism <a href="https://cointelegraph.com/news/coinbase-could-pull-clarity-act-support-over-stablecoin-rewards-ban" rel="noopener noreferrer nofollow" target="_blank">calling for</a> clearer provisions for interest and rewards on stablecoins. However, some banking groups have <a href="https://cointelegraph.com/news/banking-lobby-change-genius-act" rel="noopener noreferrer nofollow">lobbied against such stablecoin rewards</a> in the GENIUS Act, which was signed into law in July.&nbsp;
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 deposit-like competition.
“The Senate's compromise on stablecoin yield in the proposed amendments to the crypto market structure bill is a clear sign that the powers that be are committed to ensuring stablecoins remain attractive to end users, while placating banks that have lobbied heavily against such rewards,” Puckrin said in a statement shared with Cointelegraph, adding on the possibility of the bill passing:
<blockquote>
 “Whichever way the chips fall, though, it's clear stablecoins will remain a competitor to bank deposits. Short of an outright ban on any form of rewards, there's little that can stop this, and this is a new reality banks will have to reckon with.”
</blockquote>
Lawmakers in the Banking Committee will hold a markup on the bill on Thursday, potentially advancing it for a floor vote in the Senate. However, the Senate Agriculture Committee <a href="https://cointelegraph.com/news/senate-ag-punts-crypto-bill-markup-end-of-month" rel="noopener noreferrer nofollow" target="_blank">said on Monday</a> that it would not be considering its version of the bill until the end of January.
Related: <a href="https://cointelegraph.com/news/blockchain-developer-protections-brca-senate-bill" rel="noopener noreferrer nofollow">Senators pitch bill to lock in protections for crypto developers</a>
“If the bill fails in either committee, then market structure is likely to be dead for this session,” Eli Cohen, chief legal officer at Centrifuge, said in a statement shared with Cointelegraph. “If the bills pass by Republican party line vote, there would still be time to get Democrats onboard before the unified bill goes to the floor for a full Senate vote.”
<h2 id="concerns-over-midterm-elections-defi-and-conflicts-of-interest">Concerns over midterm elections, DeFi and conflicts of interest</h2>
Provisions on stablecoins, while significant for many companies and banks, are not the only potential roadblock for the bill. At least two Senate Democrats have reportedly <a href="https://cointelegraph.com/news/market-structure-bill-conflict-interest-safeguards" rel="noopener noreferrer nofollow" target="_blank">demanded the CLARITY Act</a> include safeguards to prevent public officials, including US presidents, from profiting from investments in digital asset companies.
Some experts are also wary of the upcoming US midterm elections in November potentially drawing support from the bill. TD Cowen’s Washington Research Group <a href="https://cointelegraph.com/news/us-crypto-market-structure-bill-delayed" rel="noopener noreferrer nofollow" target="_blank">speculated that the bill</a> was more likely to pass in 2027 as Democrats weigh whether control of Congress could shift from Republicans after the midterms.
US Securities and Exchange Commission (SEC) Chair Paul Atkins <a href="https://cointelegraph.com/news/sec-bullish-crypto-market-structure-bill-trump-desk" rel="noopener noreferrer nofollow" target="_blank">said on Monday</a> that he expected Trump to sign the bill into law by the end of 2026. The bill, according to its most recent drafts, would create a regulatory framework for the SEC and Commodity Futures Trading Commission, specifically for overseeing digital assets.
Magazine: <a href="https://cointelegraph.com/magazine/how-crypto-laws-changed-2025-further-2026/" rel="noopener noreferrer nofollow">How crypto laws changed in 2025 — and how they’ll change in 2026</a>

Stablecoin rewards provisions face industry test in Senate crypto bill

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