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Crypto, banks continue Senate bill spat with new proposal concerns: Report
TL;DR
Bank and crypto lobbyists are raising concerns over a new proposal in the Senate's crypto market structure bill, which aims to address stablecoin yield payments. Senator Thom Tillis plans to release a draft agreement this week to resolve ongoing disputes between banks and crypto exchanges.
Key points
- Bank and crypto lobbyists express concerns over stablecoin yield provisions
- Senator Thom Tillis plans to release a draft agreement this week
- The Senate's crypto bill aims to regulate the sector and address deposit flight
Thom TillisCLARITY Act
Bank and crypto lobbyists have both relayed concerns over the latest proposal to end the stalemate on stablecoin yields in the Senate’s crypto market structure bill, legislation that has been in limbo since the House passed the CLARITY Act in July.
Senator Thom Tillis told Politico on Monday that he plans to publicly release a draft agreement this week that aims to end a fight over a provision in the Senate’s crypto policing bill that would ban third parties, such as crypto exchanges, from offering stablecoin yield payments.
The draft had already been seen by banking and crypto representatives earlier this month, with Politico reporting that it drew pushback from the banks, according to three people with knowledge of the matter.
“I think that people are apprehensive because they haven’t seen the full text,” Tillis said. “Directionally, it has been instructed by what we consider to be the legitimate issues that we have around deposit flight when we’re talking about yield.”
The Senate’s crypto market structure bill would outline how the country’s two major market watchdogs would regulate the sector, legislation that the crypto industry has widely pushed for with the Trump administration.
However, the bill’s progress has been stalled as banking and crypto groups have been at odds over language banning stablecoin yields, despite three White House-mediated meetings between the groups to find a middle ground.
Stablecoin yields are a major business for crypto platforms, but the bank lobby wants to outlaw third-party stablecoin yield payments, arguing it is a risk to the banking system, as customers may pull deposits out of savings accounts.
Thom Tillis, pictured in 2024 at a meeting, has said progress has been made on stablecoin provisions in a Senate crypto bill. Source:
Q&A
What are the main concerns about the Senate's crypto market structure bill?
The main concerns revolve around a provision that would ban third parties, like crypto exchanges, from offering stablecoin yield payments, which has drawn pushback from banks.
Who is Senator Thom Tillis and what role is he playing in the crypto bill?
Senator Thom Tillis is a key figure in the Senate's crypto market structure bill, planning to release a draft agreement aimed at resolving the stalemate over stablecoin yields.
What is the significance of the CLARITY Act in relation to the crypto market structure bill?
The CLARITY Act, passed by the House in July, is significant as it has set the stage for the Senate's ongoing discussions and proposals regarding the regulation of the crypto market.
