A newly introduced U.S. Senate bill places stablecoin rewards at the heart of an escalating dispute between traditional banks and the crypto industry. The proposed legislation aims to establish clear and transparent rules for digital asset operations, particularly addressing how users may earn returns on their stablecoin holdings.

Senator Tim Scott Brings New Bill to the Table

According to well-placed sources, Senator Tim Scott – Chair of the Senate Banking Committee – has submitted a bipartisan draft of the bill, set for discussion on January 15. Known as the "Market Structure Bill," it is expected to spark heated debate and may proceed to a committee vote.

The draft clearly prohibits paying interest on merely holding stablecoins. However, it does allow platforms to issue rewards for users who engage in specific activities such as:

🔹 Payment processing

🔹 Staking

🔹 Providing liquidity

🔹 Offering collateral

Controversial Compromise: Coinbase Threatens Withdrawal

The compromise language was largely shaped by Democratic Senator Angela Alsobrooks, who proposed that exchanges like Coinbase may issue returns to users only when they perform certain actions—such as selling their stablecoins. Passive holding, however, would not qualify for any rewards.

Coinbase has warned that if lawmakers go beyond enhancing disclosure rules and begin tightening restrictions on loyalty or reward programs, the company may withdraw its support for the bill. Crypto companies argue that some banks are leveraging the legislation to suppress competition.

GENIUS Act Under Fire

Meanwhile, banking groups have criticized the GENIUS Act, passed in July 2025, for creating loopholes that allow platforms to offer interest-like returns without proper oversight. They argue this introduces new systemic liquidity risks.

The stablecoin regulation debate is emerging as a defining battle in the digital asset space—highlighting a growing clash between traditional finance and crypto innovators.

Wyden–Lummis Proposal Included

The bill also incorporates a bipartisan proposal from Senators Ron Wyden and Cynthia Lummis, both known for their balanced stance on crypto regulation. Their contribution could help shape a more moderate path forward—at least temporarily.

#Stablecoins , #CryptoRegulation , #USsenate , #DigitalAssets , #CryptoNews

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