Overview
- Senators and industry staff reviewed new draft language that bans paying yield for simply holding a stablecoin, with insiders calling the approach narrow and parts of it unclear.
- The compromise would only allow activity-based rewards tied to how users spend or move stablecoins, which could reshape exchange rewards programs for everyday customers.
- This draft follows an agreement in principle between Senators Thom Tillis and Angela Alsobrooks and the White House to prevent widespread deposit flight while preserving crypto innovation, which the White House’s Patrick Witt called a major milestone.
- Bank leaders warned that interest-like rewards could pull cash out of traditional accounts, while Coinbase’s January withdrawal over yield and DeFi rules underscored how the design of rewards has become a make-or-break issue.
- Key hurdles still stand before a committee vote, including rules for decentralized finance, protections for developers, limits on SEC authority, and an ethics push targeting senior officials, with analysts saying the bill must clear Senate Banking by late April or early May to keep 2026 passage in play.