TLDR
- Senators agree with White House to ban passive stablecoin yield for banks.
- Activity-based rewards on stablecoins remain allowed under new legislation.
- Banks retain safety on deposits while stablecoins dominate transaction volume.
- Centralized yield limits could push $1–3 trillion to DeFi protocols.
- Final rule by OCC on activity-based rewards will determine platform revenue.
U.S. senators have reached a tentative agreement with the White House to address stablecoin yield disputes between banks and digital asset firms. The deal focuses on how stablecoins can offer rewards without threatening traditional bank deposits. Lawmakers hope the agreement will allow the Senate to pass cryptocurrency legislation soon.
Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) confirmed the deal could lead to a crypto bill being signed within weeks. Alsobrooks said, “We’ve come a long way. This will allow us to protect innovation while preventing deposit flight.
No Passive Yield for Stablecoins
The deal prohibits stablecoins from offering passive annual percentage yields (APY) that compete with bank deposit rates. Banks currently provide roughly 0.5% APY, while crypto platforms had offered 4–8% APY.
Sen. Tillis noted that the ban protects bank deposits from arbitrage. He said, “We have an agreement in principle, now we must vet it with industry.” Activity-based rewards, such as transaction-linked incentives, are still permitted.
This approach allows banks to maintain deposit safety while digital assets continue offering new forms of transaction rewards
Crypto Payment Volume and Platform Revenue
Stablecoins already handle $33 trillion in annual transaction volume, and platforms like Kraken have Federal Reserve master accounts. The deal formally acknowledges crypto’s permanent role in the transaction layer.
However, stablecoin products on exchanges may face revenue reductions of 30–50% due to limits on passive APY. Companies will need to shift focus to interchange fees and transaction-based rewards.
The single decisive factor is how the Office of the Comptroller of the Currency defines “activity-based” rewards in the July 18 final rule. A narrow definition could reduce platform revenue, while a broader one could preserve it through transaction velocity
DeFi and Future Market Shifts
Centralized yield restrictions may drive $1–3 trillion into decentralized finance (DeFi) protocols like Aave and Compound. Investors may seek the 4–8% returns that regulated exchanges can no longer offer.
The passing of the Senate bill could standardize stablecoin regulations, creating clearer rules on token classification, intermediary roles, and small transaction tax reporting. This builds on prior House legislation, including the CLARITY Act and the Genius Stablecoin Act, both passed in 2025.
The agreement aims to balance bank safety with innovation in crypto payment systems. Lawmakers expect the April markup vote to be a key step in advancing the legislation.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
