TLDR
- Banks want tighter stablecoin reward rules before the Senate panel reviews the CLARITY Act next week.
- The compromise allows some stablecoin rewards but blocks returns on idle dollar-backed token holdings.
- Crypto firms say wider interest bans could hurt competition and limit customer choice in markets.
- Banks warn stablecoin yield products may pull deposits away from the insured banking system.
- The Senate Banking Committee plans to consider the crypto bill on May 14 in Washington.
Banks are pressing senators for late changes to stablecoin yield rules as the CLARITY Act moves forward. The Senate Banking Committee plans to review the crypto bill next week. The measure aims to set clearer rules for digital assets in the United States.
Banks Seek Narrower Stablecoin Reward Rules
Banking groups want lawmakers to tighten a compromise on stablecoin rewards. The request comes before a key Senate Banking Committee session on May 14. The panel will review the long-awaited CLARITY Act in Washington.
The dispute centers on rewards tied to dollar-backed stablecoins. Under the current compromise, firms could not pay rewards on idle stablecoin holdings. However, rewards linked to payments or other activity could still be allowed.
Senators Thom Tillis and Angela Alsobrooks helped broker the compromise. It was designed to ease a dispute between banks and crypto companies. Yet banks now say the language may still leave too much room.
Bank lobbyists have described the issue as a “loophole” in stablecoin rules. They argue some firms could still offer returns through intermediaries. Banks say that could draw money away from insured deposits.
Crypto Firms Oppose Wider Yield Ban
Crypto companies have pushed back against tighter restrictions. They say a broader ban on stablecoin interest would limit competition. They also say it could reduce choice for users and platforms.
The industry has long sought federal rules for digital assets. Supporters say the CLARITY Act would define regulator roles. It would also help decide when tokens are securities or commodities.
The bill also comes after years of tension between regulators and crypto firms. Many companies say unclear rules have slowed growth in the United States. They argue that Congress must set clear standards.
However, some Democrats remain concerned about the bill. They say it should do more on anti-money laundering controls. They also want stronger limits on public officials tied to crypto ventures.
Senate Panel Prepares To Review Crypto Bill
Senate Banking Committee Chairman Tim Scott said the panel will meet on May 14. The session is set for 10:30 a.m. in the Dirksen Senate Office Building. The review could move the bill closer to a Senate vote.
The House passed its version of the CLARITY Act last year. The Senate still needs to pass its bill before any final version can reach the president. Supporters hope to move the measure before the November midterm elections.
The bill would need support from at least seven Democrats in the full Senate. That threshold makes the stablecoin dispute important for both sides. Banks are trying to persuade some Republicans before the committee session.
President Donald Trump has backed the crypto sector and called himself a “crypto president.” His family’s crypto ventures have also drawn attention. Lawmakers now face pressure from banks, crypto firms, and political concerns as the bill advances.
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