Two lawmakers in the US Senate have published a new compromise text on stablecoin yield, an important provision aimed at regulating the digital asset market structure. This text, announced on Friday, aims to resolve one of the biggest debates within the Digital Asset Market Openness Act. Various trade associations from the crypto industry demanded that the legislative process be expedited hours after the text was announced.
Restriction on stablecoin returns
With the new text, cryptocurrency companies are prohibited from paying interest or returns on stablecoin balances, similar to banking deposits. This ban is not limited to banks only but covers all digital asset market actors. In contrast, the text makes an exception for reward programs based on genuine and transparent transactions. The US Treasury Department and the Commodity Futures Trading Commission were authorized to prepare detailed rules within one year from the entry into force of the regulation.
Summer Mersinger, executive director of the Blockchain Association, described the new text as “a step in the right direction” for the industry. He particularly drew attention to the negative effects of the continuation of legal gaps on innovative companies and capital.
“Every day passes without a clear legal framework, inviting talent and capital to go abroad,” he explained.
Different reactions from the industry to the draft law
Although organizations in the crypto ecosystem generally supported the bill, they shared some reservations. Ji Hun Kim, CEO of The Crypto Council for Innovation, stated that the new statement imposes a much more comprehensive ban than last year’s GENIUS Act. While this law only covers stablecoin issuers, the final proposal text has been expanded to include all digital asset market actors.
“As CCl, we do not support the claim that the proliferation of stablecoins will create a run on bank deposits… The text goes beyond the GENIUS Act,” commented Ji Hun Kim.
Kim also asked the committee to advance the bill and emphasized that the United States should be a leader in this field.
Circle company’s strategy chief, Dante Disparte, gave unconditional support for the compromise. Disparte pointed out that the USDC and EURC stablecoins issued by Circle are growing rapidly in cross-border payments and collateral transactions, and said, “The USA should determine the direction in digital assets, today’s step is a signal in this direction.”
Necessity of restructuring in crypto companies
Another element that stands out is the changes companies need to make in their reward programs. According to the new rules, instead of passive income based on the “buy-hold” model, rewards based on real transactions and activities will come to the fore. Crypto platforms will need to adapt to this transformation.
Coinbase was one of the most critical players in the bill negotiations. Company CEO Brian Armstrong announced his support after the new text was published. Coinbase’s legal chief Paul Grewal said that the proposal preserves rewards based on active participation and that this is in line with the demands of the banking lobby.
Previously, the US Senate Banking Committee postponed the marking of the Digital Asset Market Openness Act in January. Yield regulations appear to be one of the most controversial issues by far. Although some bargaining topics in the bill are still unclear, it is reported that the obstacles, especially regarding the stablecoin return, have been largely overcome.
