Stablecoin Compromise Revives Senate Crypto Bill

Senators Angela Alsobrooks and Thom Tillis reached a compromise on stablecoin rewards that has reopened the path for the Senate to consider broad digital-asset legislation. The agreement removes a major sticking point that stalled work in the Senate Banking Committee and could allow a second committee markup as soon as next week.

The text bars covered entities from paying interest or yield to U.S. customers solely for holding stablecoins or in ways economically or functionally equivalent to interest on bank deposits. The provision preserves activity- or transaction-based rewards tied to bona fide services or actions. Lawmakers and industry negotiators crafted the language after earlier objections prompted some firms to withdraw support.

Industry figures said the change improved the bill’s prospects. Kristin Smith, president of the Solana Policy Institute, raised her estimate of the bill’s chances to roughly 60% based on the time already invested and removal of the stablecoin objection. Cody Carbone, chief executive of The Digital Chamber, described the stablecoin language as a key development for moving the measure toward committee approval.

The legislation would allocate authority over digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission, giving the CFTC increased oversight over certain products. The House passed its Clarity package last summer, and the Senate Agriculture Committee approved its version in January. The Senate Banking Committee paused consideration while negotiators worked through stablecoin and market-structure disputes.

Debate continues over how to treat less-liquid tokens and market-structure rules. Some exchanges pushed for looser standards for smaller or infrequently traded assets to allow listings. Consumer and market-integrity advocates pushed back, arguing crypto markets can be more susceptible to fraud and manipulation than traditional commodity markets.

An ethics provision may be the next major hurdle. Senator Kirsten Gillibrand has said she will not support the bill without restrictions on certain digital-asset transactions by the president, vice president, members of Congress and other federal officials. Democrats offered such amendments in committee, but those limits were not included in the version that moved forward. Supporters of an ethics restriction say it could attract as many as 70 votes in the Senate, above the 60 needed to advance the bill.

President Donald Trump’s crypto ventures have added urgency to the ethics debate. Estimates place the value of Trump-related digital-asset projects in the hundreds of millions to more than $1 billion, and a recent transaction tied to the United Arab Emirates has raised questions about national security and foreign influence risks. Senate Banking Committee Chair Tim Scott has indicated ethics language falls outside his panel’s jurisdiction, which could require negotiators to seek another legislative vehicle or obtain the president’s assent for any restrictions.

Other unresolved items include provisions for decentralized finance and a measure that would clarify that non-custodial developers are not money transmitters. Law enforcement and some regulators caution that that clarification could hinder investigations and prosecutions of financial crime; supporters say clarity is needed so developers of non-custodial tools are not treated as banks.

Lawmakers also remain focused on whether the CFTC has the staff and resources to assume broader authority. The SEC currently employs roughly six times as many people as the CFTC, and some Democrats want firm commitments for additional funding and personnel. CFTC Chair Michael Selig has said the agency is hiring, using artificial intelligence for market surveillance and improving efficiency, while former commissioners and industry observers have called for stronger resourcing plans.

If the Senate approves a bill, the House will need to decide how to respond to any changes, and procedural disputes are possible. Some policy experts warn that election-year politics and added amendments could complicate final passage. Negotiators say they plan to resolve remaining disputes quickly so the Senate can vote this spring; ethics rules, enforcement authority and agency capacity remain to be settled before a bill could reach the president’s desk.