Key negotiators in advancing sweeping crypto legislation have reached an “agreement in principle” on the treatment of stablecoin yield, which has become one of the top issues in passing a crypto market structure bill.
Sens. Angela Alsobrooks, D-Md., Thom Tillis, R-N.C., and the White House have reached that agreement, Alsobrooks spokesperson Connor Lounsbury told The Block. Politico earlier reported the news.
“This is an important step forward for market structure legislation, a step that both have worked for months to resolve,” Lounsbury said. “Of course, there are still outstanding issues in the wider legislation — including ethics and illicit finance — that still need resolution to secure a broad, bipartisan vote in the Banking Committee.”
The agreement in principle seeks to protect stablecoin innovation and against deposit flight, a key concern raised by many on both sides of the aisle, Lounsbury said.
Sen. Tillis and the White House did not immediately respond to a request for comment.
The White House’s Patrick Witt called the agreement in principle a “major milestone” in a post on X.
“More work to be done to close out this and other outstanding issues, but this is a major milestone toward passing the CLARITY Act,” Witt said.
Point of contention
The debate over how to handle stablecoin rewards has become a major point of contention for the Senate Banking Committee, where both Tillis and Alsobrooks serve. The topic was addressed in the GENIUS stablecoin law, passed in July, which prohibits stablecoin issuers from paying interest directly to holders. However, the law does not stop third-party platforms, like Coinbase, from offering rewards.
Banking industry advocates argued that permitting such yields could siphon deposits away from traditional institutions, potentially harming community banks. Crypto companies, on the other hand, contend that limiting these rewards would hinder innovation. In recent weeks, the White House has convened three meetings to try to broker a solution, but no agreement has yet been reached.
The Senate Banking Committee has faced several hiccups over the past year in trying to pass a crypto bill out of its panel. A future bill would aim to clarify how regulatory authority is divided between the Commodity Futures Trading Commission and the Securities and Exchange Commission, spell out when digital assets should be treated as securities versus commodities, and introduce new disclosure requirements.
Last year, the House approved its version of a crypto market structure bill — known as the Clarity Act — with bipartisan backing. In January, the Senate Agriculture Committee, which oversees the CFTC, passed its own version along party lines without any Democratic support.
The Senate Banking Committee had planned to hold a January hearing to move forward with its proposal, but the session was canceled at the last minute after Coinbase withdrew its support, in part due to concerns around stablecoin yield.
If a bill passes out of the Senate Banking Committee, it will have to be reconciled with the Senate Agriculture Committee before going to a full floor vote. A full Senate vote requires 60 yes votes, so it needs Democratic buy-in.
Sen. Cynthia Lummis, R-Wyo., told an audience earlier this week that the banking committee will hold a hearing to amend and vote on a bill next month after the Easter recess.
In an interview on Friday with CNBC, Haun Ventures CEO Katie Haun voiced concerns about whether sweeping crypto legislation would have enough time.
“But to me, the big question on the Clarity Act is, is Congress going to get a bill to the floor on time to vote?” Haun said. “And so I think they need to move very deliberately after Easter recess to get this bill to the floor. But again, I’m cautiously optimistic.”
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