March 11 News: Negotiations in the U.S. Senate over legislation related to the crypto market structure are ongoing, but the issue of stablecoin yields remains a key point of contention. Democratic Senate Banking Committee member Angela Alsobrooks recently stated that both the crypto industry and the banking sector need to accept certain compromises in the new round of crypto regulation proposals to move the legislation forward.
At an American Bankers Association event, Angela Alsobrooks noted that she is working with Republican Senator Tom Tillis to find a compromise, but both interest groups cannot let a “perfect solution” hinder legislative progress. She said that the future regulatory framework must neither leave crypto assets completely unregulated nor allow stablecoins to disrupt the traditional banking deposit system.
The current debate mainly centers on whether stablecoins can offer interest or rewards. Banking groups believe that if stablecoins provide yields similar to savings accounts, it could lead to funds flowing out of the banking system, affecting financial stability. Therefore, organizations including the American Bankers Association are pushing for the Senate to include provisions in the crypto market structure bill that restrict third-party stablecoin yield payments.
The banking industry also points out that this restriction could help address certain loopholes in the GENIUS Act, which already prohibits stablecoin issuers from directly paying yields to users, though some market participants might offer similar incentives through other structures.
On the other hand, representatives of the crypto industry oppose a complete ban on stablecoin reward mechanisms. Industry insiders believe that yields or rewards are common user incentives in the digital asset ecosystem, and removing them entirely could weaken stablecoins’ competitiveness in payments and digital finance.
Angela Alsobrooks emphasized that stablecoin regulation should avoid creating product structures similar to banks but lacking banking regulatory protections. She pointed out that if a financial product functions like a deposit, it must be subject to appropriate regulatory requirements.
Meanwhile, a survey conducted by the American Bankers Association shows that 42% of respondents believe Congress should consider restricting products if stablecoin yields could impact the stability of banking system funds. The survey also found that 84% of respondents think financial products offering savings-like services should adhere to the same consumer protection rules as banks.
As the debate over stablecoin regulation, digital asset market structure, and the interests of traditional finance continues, the final direction of U.S. crypto regulation remains uncertain. Whether the Senate can strike a balance among various interests will directly influence the future regulatory framework for stablecoins and the development of the crypto market in the United States.
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