WASHINGTON—Two Senate Banking Committee members have circulated compromise language on stablecoin interest and rewards, a move that appears to remove a major obstacle that had stalled Senate action on crypto market-structure legislation known as the CLARITY Act.
The language from Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) would bar stablecoin rewards that are “economically or functionally equivalent” to interest paid on bank deposits, American Banker reported. CoinDesk reported the text would still permit “bona fide” rewards tied to activity or transactions, rather than passive payments for simply holding stablecoins.
The issue had become a central fight between banks and crypto firms. Banks have warned yield-bearing stablecoins could drain deposits from traditional financial institutions, while fintech and crypto companies have argued rewards are important to adoption and competition. Reuters previously reported that the dispute had helped delay Senate Banking Committee action on the CLARITY Act.
The compromise could clear the way for a committee markup, though other political hurdles remain. Barron’s reported the deal is significant for Coinbase, which has offered yield on USDC, while Investors Business Daily reported crypto stocks rallied after the compromise surfaced.