Two U.S. senators — Republican Thom Tillis and Democrat Angela Alsobrooks — who are negotiating a controversial provision in the crypto industry’s market structure bill have reportedly agreed on a compromise that could advance the crypto industry’s top priority to the next stage in the Senate.
Politico quoted the pair as saying they had agreed in principle on an approach to stablecoin yields in the Digital Asset Market Clarity Act, which could resolve one of the top unresolved issues in the sweeping bill. However, no further details were revealed, other than Alsobrooks reaffirming that the yield protocol will prohibit rewards on passive balances of stablecoins.
Bankers believe stablecoin rewards for holding dollar-pegged tokens could be very similar to interest on bank deposits, and any threat to a core component of the U.S. banking industry could put loans at risk. Alsobrooks and Tillis both agreed on finding an approach that didn’t threaten the banking industry.
The White House was reviewing the updated legislative text on Thursday, CoinDesk previously reported. White House officials did not immediately respond to a request for comment on Friday’s developments.
Industry insiders told CoinDesk they are aware of the new compromise but have not yet seen the text of the legislation that senators have agreed to.
While the stablecoin issue is at the forefront of the Clarification Act negotiations, there are many other issues that need to be addressed, including the bill’s treatment of decentralized finance (DeFi), an area where some Democrats have expressed uneasiness about illicit finance.
Lawmakers have said in recent days that the CLARIFICATION Act could get a Senate Banking Committee hearing late next month. If it is approved, it will go to the Senate, although it will first need to be merged with a similar version that has already passed the Senate Agriculture Committee.
Supporters had been hoping May would resolve years of legislative work. But Senate floor time is at a premium and is threatened by unrelated issues, such as Republicans’ voter ID bill and back-and-forth arguments over the Iran war.
