Senate Anticipates Compromise on Stablecoin Yield Payments Provision

U.S. Senator Tim Scott has expressed optimism about reaching a compromise on a stablecoin yield payments provision that has delayed progress on a crypto market structure bill in the Senate. According to Cointelegraph, Scott, who chairs the Senate Banking Committee, indicated at a crypto lobby event in Washington, D.C., that he expects to receive the first proposal for review this week. He noted that if the proposal arrives as anticipated, it could significantly advance the bill's progress. The Senate aims to move forward with its version of the crypto market structure bill, which seeks to establish regulatory approaches to cryptocurrency following the House's passage of the CLARITY Act in July. However, negotiations between banking and crypto lobbyists have stalled the Senate's bill, particularly over a provision that would prohibit third parties from offering stablecoin yield payments. Banking groups argue that these yields, offered by platforms like crypto exchanges, exploit a loophole in the GENIUS Act, which banned yield payments from stablecoin issuers, potentially destabilizing the banking system through deposit flight. In contrast, crypto lobbyists have challenged these claims, accusing banks of anti-competitive practices. Scott acknowledged that while the stablecoin yield issue is the most prominent challenge, other significant matters are also under negotiation. These include provisions related to ethics, decentralized finance, and the delineation of entities subject to the rules. Despite the prominence of the rewards issue, Scott emphasized the importance of addressing these other outstanding issues. He highlighted the progress made over the past month, noting a growing momentum in favor of advancing the bill. The procedural rules require two Senate committees to oversee the crypto market structure legislation, as it involves both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The Senate Banking Committee, responsible for the SEC, postponed a markup of the crypto bill indefinitely in January, while the Senate Agriculture Committee, overseeing the CFTC, advanced its markup to the Senate floor during the same period.