Negotiating senators are poised to release draft text of a compromise this week over the stablecoin yield debate, which has stalled crypto’s market structure bill. This comes despite pushback from banking groups, who have expressed dissatisfaction privately.
The crux of the dispute lies in whether crypto exchanges should offer yields to stablecoin holders via rewards programs, a contentious point that has delayed progress on the Clarity Act for months.
Sen. Thom Tillis (R-NC), working alongside Sen. Angela Alsobrooks (D-Md.), announced Monday his intention to make the draft text public later this week, as reported by Politico.
“We’ve made headway on anti-evasion issues and continue to refine enforcement measures,” Tillis stated, suggesting stakeholder concerns might be due to their lack of access to the complete text.
Earlier, the American Bankers Association criticized a White House Council of Economic Advisers report that suggested banning stablecoin yield would only marginally increase bank lending by 0.02%. They argued this analysis was flawed as it based its risk assessment on today’s $300 billion market rather than projecting potential growth to between $1 and $2 trillion.
With the Clarity Act nearing a legislative deadline, key senators have warned that failure to pass the bill before midterms risks its demise. Last week, Treasury Secretary Scott Bessent implored lawmakers to finalize the legislation, labeling crypto firms resistant to compromise as “nihilists.”
Publicizing the draft could redefine how crypto exchanges like Coinbase manage stablecoin rewards programs, including arrangements with USDC issuer Circle that offer users an annual yield of approximately 4%.
Despite the debate’s intensity, bipartisan support for market structure legislation remains strong.
“The momentum behind this legislation is bipartisan because leaders recognize the necessity of establishing clear rules for digital assets,” Blockchain Association CEO Summer Mersinger told Decrypt. “Passing it would enhance U.S. competitiveness and provide certainty for innovators and consumers alike.”
Observers are now examining whether the White House report might alter the negotiation’s political dynamics.
“With economists from the White House concluding that stablecoin yield would minimally increase bank lending by 0.02%, sustaining claims of it being a systemic banking threat becomes challenging,” Simon Jones, CEO of Reya, told Decrypt. He added that the debate has evolved beyond economics into competitive positioning.
However, some analysts believe the report alone will not resolve the issue or ensure an agreeable compromise for all parties.
“A possible middle ground might be action-based yield rather than passive yield,” said Stefan Muehlbauer of CertiK. “Yet, there remains a risk that yields could be banned, causing exchanges to reject such a deal.”
An overly restrictive stance on U.S. yield distribution might push users and liquidity toward more permissive jurisdictions.
“The policy question extends beyond whether stablecoin holders receive yield to where it is provided and under whose regulation,” said Pierre Person of Fira.