Key Highlights
- Senators Tillis and Alsobrooks have drafted a new proposal on stablecoin rewards that crypto firms and banks will review privately this week.
- The proposal aims to settle a long dispute between both bodies.
- The stablecoin debate is tied to the CLARITY Act, a U.S. law to regulate digital assets.
U.S. Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) have drafted a NEW proposal on stablecoin yield, which crypto firms and banks are set to review this week.
According to a report from Politico, crypto firms are expected to examine the draft today, while banks will review it on Friday. The proposal is intended to settle a long-standing disagreement over whether stablecoin issuers can offer interest-like payments. The review will happen in controlled settings where no copies of the proposal are allowed.
New proposal amid disagreement
The draft comes after several meetings between Senate staff and officials from crypto firms and banks. These meetings collected feedback on an earlier agreement on the ongoing talks to create rules for digital assets.
The report stated the proposal may allow certain activity-based rewards for stablecoin users, but it may limit regular interest-like payments. It remains unclear whether the approach will satisfy both sides.
Concerns around stablecoin yield
Stablecoins are digital tokens usually pegged to the U.S. dollar and backed by cash or short-term securities. In recent years, the adoption of stablecoins has skyrocketed as people now use them for payment, trading, and to move money across the crypto markets.
However, banks are worried that if they give interest-like rewards, it could act like a bank account that is not regulated, which could influence people to take their money from insured bank accounts and could affect the financial system.
The CLARITY Act and discussion on other regulations
The debate is linked to the CLARITY Act, a proposed U.S. law designed to set clear rules for crypto exchanges, digital tokens, and other services that handle digital money. It follows the GENIUS Act, which was passed into law in 2025 and established a federal framework for stablecoins.
Discussion on the CLARITY Act lessened in January because of arguments over stablecoin rewards. While banks oppose interest-like features, crypto firms argue that users should have access to such benefits. The White House has been involved in facilitating discussions.
Other issues have also been discussed, including rules for decentralized finance (DeFi), which are financial services without traditional banks, and rules to prevent government officials from conflicts of interest with crypto.
The Senate Banking Committee may hold a markup session on the CLARITY Act in the second half of April. With limited legislative time before the August recess and upcoming November 2026 elections, resolving the stablecoin yield issue is seen as important for advancing the bill.
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