U.S. Senate crypto bill puts stablecoin rewards at center of banking clash

Senators in the United States have released a draft market structure bill that outlines established, transparent regulations to govern stablecoin rewards. Under these rules, interest payments settled solely in connection with the holding of a stablecoin are prohibited while permitting rewards allocation for particular activities. 

Following this release, reports from reliable sources indicated that Senator Tim Scott, Chairman of the US Senate Committee on Banking, Housing, and Urban Affairs, had presented a new bipartisan draft to the Senate Banking Committee. 

This bipartisan draft, known as a “negotiated market structure bill,” is set to undergo a markup session on Thursday, January 15. At this particular moment, committee members will conduct a heated debate on this legislation and may later proceed to a vote on the bill.

Analysts identify a significant challenge in the stablecoin ecosystem 

Sources described the “negotiated market structure bill” as a game-changer set up to tackle highly contentious issues at the negotiating table. Notably, these challenges sparked intensified discussions between cryptocurrency firms and the banking sector for weeks.

These sources decided to disclose the main content of the bill. They noted that this draft market structure bill clearly stated that digital asset service providers are not allowed to make interest or yield payments to users in relation to their stablecoin holdings. 

Nonetheless, they highlighted that these providers are permitted to offer rewards to their users in connection with specific activities, such as processing payments, staking, providing liquidity, or offering collateral. 

Interestingly, this newly released wording includes a compromise that Democratic Senator Angela Alsobrooks proposed last week. Alsobrooks played a key role in the talks. 

In her suggestion, crypto exchanges are permitted to issue yields to their users on stablecoins if clients carry out specific activities, such as selling their stablecoins. However, it forbids rewards for stablecoins that are just stored in an account.

With this finding, analysts concluded that challenges arising from issues related to stablecoins yields have generated considerable friction between banks and the crypto industry. 

At this point, banking groups have raised concerns that the GENIUS Act, a US federal law enacted in July 2025, has established gaps that enable issuers or platforms to provide interest-like returns, thereby initiating new liquidity risks.

Uncertainties surrounding rewards for stablecoins spark debate among individuals 

Reports clarified that the stablecoin law does not hinder third-party crypto platforms, such as the major crypto exchange and platform Coinbase, from issuing rewards to their users, despite prohibiting issuers from conducting direct interest payments.

After these reports highlighted this situation, several crypto firms declared that the matter was already settled at the time talks about the GENIUS Act were held, hence alleging that banks are attempting to restrict their competition.

Recognizing the increasing tension of the situation, Coinbase issued a warning that it would withdraw its backing for the market structure bill if lawmakers decide to go beyond just implementing improvements in disclosure requirements and start to impose more stringent restrictions on reward programs. 

On the other hand, sources noted that, apart from stablecoins, the newly established draft comprises a bipartisan proposal from the US Senators Ron Wyden and Cynthia Lummis.