📅 January 13 | Washington D.C.
While the crypto market attempts to mature under a clear legal framework, the real clash isn't happening on charts or the blockchain, but in the halls of the U.S. Senate. The release of a lengthy 278-page bill by the Senate Banking Committee has ignited a silent but decisive battle between traditional banks and the crypto industry, with a sticking point that could redefine the stablecoin model: rewards and returns for users.
📖Senate Banking Committee Chairman Tim Scott released the preliminary text of ambitious crypto market structure legislation that seeks to divide oversight of digital assets between the SEC and the CFTC, establishing clear criteria for which assets are securities and which are commodities. However, beyond the regulatory distribution, the real point of tension lies in the treatment of rewards associated with stablecoins.
The debate directly pits banking groups, who see stablecoins as a threat to traditional deposits, against crypto platforms, who defend incentives as a legitimate form of financial competition. Although the GENIUS law, passed last summer, prohibits stablecoin issuers from paying direct interest, it leaves the door open for third parties such as exchanges to offer rewards, a loophole that is now being addressed.
The new legislation would prohibit crypto service providers from paying any form of interest or returns simply for holding payment stablecoins. However, it allows exceptions when rewards are tied to economic activity, such as transactions, liquidity provision, staking, or use as collateral. This wording, far from ending the debate, has generated new political friction.
Sources close to the negotiations say the current text does not fully reflect the compromise reached with Senator Angela Alsobrooks, who had proposed a more restrictive approach allowing returns only when the user performs specific actions, such as selling or moving their stablecoins, but never for simple passive holding. According to Democratic sources, the current language leaves too many exceptions open and does not establish an effective prohibition.
Meanwhile, a tougher amendment is expected to be introduced, with enough votes to be included in the Banking Committee's final draft, which could severely limit incentives for stablecoins. This possibility has heightened tensions with the crypto industry, which warns that a broad ban could stifle innovation and return power to the big banks.
Topic Opinion:
Rewards are not just an economic incentive, but a symbol of who controls digital capital. If the Senate opts for a broad ban, financial innovation will have to adapt to the existing banking system.
💬 Is the Senate protecting the consumer… or the banks?
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