U.S. Senate advances cryptocurrency market restructuring: Stablecoin interest regulation becomes a focus

The U.S. Senate has made significant progress on cryptocurrency policy. According to the recently released bipartisan draft, regulators plan to implement structural regulations on stablecoin yield mechanisms, ending the situation where users can automatically profit simply by holding stablecoins. This reform is led by Senate Banking Committee Chairman Tim Scott, preparing for the committee review this Thursday.

Core Content of the New Framework: From “Passive Holding” to “Active Behavior”

According to the amendment, digital asset service providers are prohibited from paying any form of interest or yield to users who “merely hold payment stablecoins.” However, this restriction is not absolute—if the yield is directly linked to specific user actions, it is not subject to the ban. This means that if users engage in trading, staking, providing liquidity, or collateralizing, platforms can still offer corresponding rewards and incentives.

This structured regulatory approach reflects the compromise advocated by Democratic Senator Angela Alsobrooks. As a key negotiator of the bill, she has found a balance between defining regulatory red lines and maintaining industry operational flexibility. According to her stance, cryptocurrency platforms can only provide stablecoin yields when users “take specific actions,” such as selling stablecoins or participating in related activities; but if funds are simply idle in accounts, no rewards may be paid.

Confrontation Between Banking Industry and Cryptocurrency Sector

The policy on stablecoin yields has long been a contentious issue in U.S. financial regulation. Bankers argue that although the GENUIS Act passed two years ago prohibits stablecoin issuers from paying direct interest, it leaves regulatory loopholes—specifically, it does not restrict platforms like Coinbase from offering reward programs to users.

The crypto industry has objected, claiming that the issue of stablecoin yields was already addressed during GENUIS Act negotiations, and accusing banks of trying to restrict industry competition. Coinbase has even publicly warned that if the new bill overly restricts reward programs, the company will withdraw support for the entire legislation. This stance reflects the crypto industry’s sensitivity to regulatory red lines.

Compliance Protections for Software Developers

The new draft includes important provisions proposed by Senators Cynthia Lummis and Ron Wyden. These provisions exclude software developers and infrastructure providers (such as miners or node operators) from the definition of “financial intermediaries,” ensuring they are not burdened with additional compliance obligations simply for writing open-source code. This protection is seen as key to maintaining innovation within the crypto ecosystem.

Ethical Controversies and Political Compromises

It is noteworthy that the new draft does not include “ethics clauses” targeting President Trump and his family’s cryptocurrency ventures. According to Bloomberg estimates, Trump’s family has profited approximately $620 million through projects like World Liberty Financial. Democratic insiders had strongly lobbied to include conflict-of-interest restrictions in the bill, but moderate party members like Senator Ruben Gallego warned that overly aggressive ethics clauses could derail the entire bill and jeopardize the legislative process.

Next Steps and Bicameral Coordination

This amendment is regarded as an important milestone in advancing cryptocurrency market structure legislation, laying the groundwork for the Senate Banking Committee’s formal review this week. Meanwhile, the Senate Agriculture Committee has postponed its related hearing originally scheduled for this week to the end of the month, indicating that more time is needed to gather diverse opinions.

Ultimately, the versions from the Banking and Agriculture Committees must be reconciled before being sent to the full Senate for a vote. Next, lawmakers will also need to address the House version of the Digital Asset Market Clarity Act—which passed the House in the summer of two years ago. A comprehensive cryptocurrency market structure bill must pass both chambers before being sent to President Trump for signature into law.