Banks insist on banning stablecoins! U.S. Senator Tillis issues a final warning: Reject crypto legislation that lacks ethical provisions

Thom Tillis, a key Republican member of the Senate Banking Committee, announced that he will push to bring the crypto market regulation bill—stalled for months—back into the voting process after the Senate reconvenes on May 11. However, he also issued a tough warning: if the bill does not include an ethics provision that limits government officials from using cryptocurrencies, he will change from being a negotiator to voting against it. The bill is still stuck amid controversy over the stablecoin yield ban; since January this year, it has been delayed after Coinbase withdrew its support.
(Background: The Clarity Act accelerates the track! Senator Thom Tillis signals plans to push the “Clarity Act” into review, with stablecoin yield provisions set to be unveiled)
(Additional background: Breaking news》Wally Adeyemo’s nomination for Fed chair passes the Senate Banking Committee! Next step: full Senate vote, and a crypto-friendly chair is about to take office)

Table of Contents

Toggle

• The House clears early; the Senate version gets stuck for half a year
• Developer protections and enforcement concerns become the new battleground
• Ethical provisions become Tillis’s personal red line
• Bill outlook: a fragile balance amid multiple rounds of tug-of-war

U.S. Senator Thom Tillis told reporters on Wednesday that after the Senate reconvenes on May 11, he will ask Tim Scott, the chair of the Senate Banking Committee, to “advance the markup schedule,” so that the crypto market regulation bill—stalled for months—returns to the voting track. At the press conference, Tillis said plainly:

I think we’ve made a lot of progress. But at the end of the day, unless there’s a mandatory mechanism like the markup, everyone who truly doesn’t want to push the bill will always find something else to talk about. It’s time to send the bill to committee and move it forward.

The House clears early; the Senate version gets stuck for half a year

This crypto market regulation bill is intended to clarify how U.S. regulators divide oversight responsibilities for crypto assets between the two major financial regulators—the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The House version, the CLARITY Act, passed last July, but the Senate version has been deadlocked since this January.

The spark was the stablecoin yield ban provision: the bill would bar third parties such as crypto exchanges from paying users stablecoin yields. In January, crypto lobbying heavyweight Coinbase withdrew its support for the bill in opposition to this provision, prompting the Senate Banking Committee to delay the markup.

Industry lobbying groups representing the banking sector support the provision, arguing that prohibiting third-party payments of stablecoin yields would plug a “loophole” in the GENIUS Act (which bans stablecoin issuers from paying yields).

Tillis said: “I believe we’ve heard and addressed many concerns from the banking industry. If they’re willing to cooperate in good faith, maybe we can resolve some issues; otherwise, I will urge the chair to move the markup forward directly.” He added that he hopes the bill text will be made public at least 4 days before the markup, so that stakeholders from both the crypto and banking industries can preview it.

Developer protections and enforcement concerns become the new battleground

Beyond stablecoin yields, another controversial provision in the bill involves legal protections for software developers. The provision is designed to protect crypto software developers so they do not get prosecuted for illegal activities carried out by others on their platforms.

Politico reported on Tuesday that Tillis said the bill “needs to address law enforcement’s concerns about this provision.” But on Wednesday, he told reporters that he “largely supports” the progress Senator Cynthia Lummis has made on this provision.

Ethical provisions become Tillis’s personal red line

The most consequential remarks came on Monday: Tillis publicly backed a demand from the Democratic side of the Senate Banking Committee, saying that if the bill does not include ethics provisions limiting government officials’ use and promotion of cryptocurrencies, he will cast a no vote.

“The bill must include ethics language before it leaves the Senate, or I will go from being one of the people participating in the negotiations to voting no.” Tillis said with conviction.

This announcement dealt a shock to the bipartisan bill—because Tillis is a key Republican member of the Senate Banking Committee, if he turns to oppose it, the likelihood of the bill advancing through the committee would drop substantially.

Bill outlook: a fragile balance amid multiple rounds of tug-of-war

At present, the bill faces three major stand-offs:

• Stablecoin yield ban: Coinbase and the banking-industry lobbying groups are at odds
• Developer protections: enforcement agencies’ concerns vs. the industry’s calls for innovation
• Ethics provisions: Democrats and Tillis’s red line vs. divisions within the Republican Party

Tillis’s strategy is clearly “push the markup first, then resolve disagreements through amendments.” But amid entangled interests, whether the bill can move smoothly into a vote after the Senate reconvenes on May 11 still remains full of variables.

If the bill ultimately passes in the Senate, it will enter the conference process with the House version, forming the United States’ first complete crypto market regulatory framework—but for now, even the very first step has not yet been firmly set.