While the wait for new regulations in the cryptocurrency market continues, uncertainty continues in the calendar regarding the discussion of the Crypto Market Structure Bill in the committee in the US Senate. Republican Thom Tillis, one of the important figures on the Senate Banking Committee, announced that he does not expect a hearing to be held to vote or amend the bill in the committee in April. It is stated that the process is deadlocked within the committee and the tension in the crypto industry is rising.
New regulatory impasse in stablecoin debate
Recently, Senator Tillis and Maryland Democrat Angela Alsobrooks came to the fore with their negotiations to resolve the impasse regarding stablecoin rewards. Discussions regarding regulations in the field of stablecoins especially focus on reward systems. Although the GENIUS stablecoin bill passed in July prohibits stablecoin issuers from paying interest directly, it does not prevent external platforms like Coinbase from offering rewards. Representatives of the banking sector argue that this practice may lead to the withdrawal of deposits from banks and the weakening of local financial institutions.
Cryptocurrency companies, on the other hand, agree that restrictions on reward systems will disrupt innovation. Sources close to the committee stated that the final draft text includes statements regarding the prohibition of giving rewards on idle stablecoin balances, but protecting activity-based returns. Additionally, it is claimed that it is now difficult to make any serious changes to these parts of the text.
Stablecoin rewards are one of the knotty issues in crypto legislation. While industry representatives say, “Banning these awards will stop innovation,” banking lobbies argue that this poses a risk for the traditional financial system.
Process and decision calendar in the Senate
The slow pace of work on the bill has led to increased pressure in the Senate and the crypto community. A version of the bill passed the House of Representatives almost a year ago and advanced through party lines in the agriculture committee. However, in order for the final regulation to become law, the two versions must be combined after the approval of the banking committee.
In March, Senator Cynthia Lummis announced at the Blockchain Summit in Washington that the committee was targeting an April vote. However, Senator Bernie Moreno warned that if the bill does not move forward soon, the law on digital assets may not be passed in the near future. According to the chairman of the committee, Tim Scott, there is a possibility that the legislation will be brought to the agenda again in May.
The draft regulation aims to clarify which digital assets will be considered securities or commodities, which institution will be given supervisory authority, and the scope of transparency obligations. Over the past year, debate and lobbying over the bill has made it difficult for the committee to advance.
Industry pressure is increasing
It was stated that last week, banking sector representatives conveyed their concerns about the final regulatory text to other senators in the committee. On the other hand, activity on the crypto bill remained in the background for a while as the committee’s focus this week turned to the confirmation process of Kevin Warsh, one of the US Federal Reserve chairman candidates.
Additionally, The Digital Chamber CEO Cody Carbone, in his letter to senior figures in the Senate, emphasized that establishing the legal framework for digital asset markets as soon as possible is critical to maintaining the leadership of the innovative financial sector in the USA. Carbone stated that millions of people adopting digital assets in the markets expect clear legislation.
“Providing regulatory clarity is important for the 70 million Americans who prefer digital assets and is essential to strengthening U.S. leadership in the next generation of financial technology.”
