Legislation that could fully integrate the U.S. cryptocurrency industry into the regulated financial system has emerged in its latest form, with the Senate Banking Committee releasing the text of a market structure bill just after midnight on Tuesday before moving forward with the effort at hearings this week.
The latest version isn’t expected to bring many surprises to the cryptocurrency industry, which has already had a chance to delve into it privately, but it includes language about still-controversial stablecoin yields and preserves legal protections for decentralized finance (DeFi) developers, keeping this corner of the cryptocurrency industry happy (so far). Those in the industry waited late into the night for the release, and they still had to work on the language to make sure it met their expectations.
“This bill reflects serious, good-faith work across the committee and provides the certainty, safeguards, and accountability Americans deserve,” Committee Chairman Tim Scott said in a statement. “It puts consumers first, fights illicit finance, fights criminals and foreign adversaries, and keeps the future of finance in the United States.”
While the committee’s approval would mark a major step in a long-stalled effort, whether the bill will reach President Donald Trump’s desk is far from certain. Actions taken this week will keep passage likely, although many other hurdles remain – including the insertion of an ethics provision that is not yet in this draft.
moral rules
The conflict-of-interest component that theoretically limits government officials from profiting from the crypto industry does not fall under the jurisdiction of the banking panel, so the topic would have to enter legislation later. It’s a contentious issue because its origins are based on President Donald Trump’s own extensive cryptocurrency interests, but White House officials have repeatedly said they would not tolerate bills targeting the president. Meanwhile, Sen. Kirsten Gillibrand said last week at Consensus 2026 in Miami that Democrats would not allow the bill to pass without such a provision.
On the same stage in Miami, White House cryptocurrency adviser Patrick Vitter said the current negotiating stance is to have “rules that apply across the board, from the president all the way down to the brand new interns on Capitol Hill,” but rejected any rules targeting specific offices or public officials.
Sen. Elizabeth Warren, the committee’s ranking Democrat, made clear that ethics issues are a priority and issued critical comments alongside the committee’s release of the document.
“This bill puts investors, our national security, and the entire financial system at risk and will exacerbate Donald Trump’s cryptocurrency corruption,” she said in a statement. “In just one year in office, the president and his family have made at least $1.4 billion from crypto trading alone, yet surprisingly, the bill includes zero provisions to prevent this from happening.”
That ethics portion, however, remains on hold until a Senate committee votes to approve the rest of the bill at a hearing Thursday.
Stablecoin Yield
The newly released 309 pages of text include the basis for the policy that lobbyists have spent months arguing about what types of yields stablecoins can accept. The document limits the payment of interest or earnings “solely in connection with holding… payment of stablecoins” or stablecoin balances “in a manner that is economically or functionally equivalent to payments of interest or earnings on interest-bearing bank deposits.”
Earlier on Monday, Coinbase CEO Brian Armstrong, whose company is at the center of stablecoin reward talks, held a live event on social media site
“We want to be a win-win partner with the bank,” Armstrong said.
The outcome for committee negotiators may have been decided, but bankers who believe stablecoins pose a threat have launched a final push to change the outcome. Over the weekend, industry lobbying groups asked their members to launch a final push to lawmakers ahead of a hearing to further restrict stablecoin reward programs.
Meanwhile, a Galaxy Group research report released last week said trillions of dollars worth of foreign capital will flow into the U.S. financial system, easily making up for the disruption to domestic deposits. The report “suggests that the majority of stablecoin growth will originate overseas, meaning foreign capital will flow into U.S. banking infrastructure at a rate far exceeding any domestic deposit migration.”
Decentralized Finance
The legislation still includes a matching portion of the DeFi Blockchain Regulatory Certainty Act, which protects software developers who cannot control people’s funds from being deemed money transmitters, as well as many other demands from DeFi defenders.
“We are encouraged by the direction of recent negotiations and note that the most important provisions for developers and infrastructure providers – the BRCA and protections under the Exchange Act – are included in the bill,” the DeFi Education Fund said through a spokesperson. He added that the organizations will be tracking the amendments this week and will flag those who oppose the industry.
Meanwhile, on Monday, Punchbowl News reported on an agreement between Senate lawmakers to address law enforcement needs in the CLARITY Act, specifically allowing prosecutors to pursue cryptocurrency wrongdoing in relation to money laundering.
The White House’s Witte said last week that the administration aims to have the CLARIFICATION Act completed by July 4, although Sen. Gillibrand expects the bill to be completed by the first week of August.
work to be done
Until then, Senate negotiators still have some work to do after the bill moves through committee. Assuming the Clarification Act is approved by the panel, it would still need to be merged with a similar version approved earlier by the Senate Agriculture Committee.
Lawmakers will then need to grapple with thorny conflict-of-interest provisions, with a final version likely going to the full Senate for a vote, which would require 60 votes in favor — which will inevitably include a large number of Democrats. So far, progress in the Senate has hinged on Republican votes, but when the final vote comes, other cryptocurrency efforts typically receive major bipartisan support.
Last year, the Guiding and Establishing a National Innovation for Stablecoins in the United States Act of 2025 (GENIUS) successfully passed the Senate with a vote of 68 to 30, easily passing the minimum requirements.
Read more: Banking groups escalate debate over stablecoin yields ahead of Senate vote
Update (04:31 UTC, May 12, 2026): Added comments from Sen. Tim Scott, chairman of the Senate Banking Committee.
Update (04:43 UTC, May 12, 2026): Add language from the text of the proposed bill.
Update (May 12, 2026 05:01 UTC): Added comments from Coinbase CEO Brian Armstrong.
Update (May 12, 2026 05:05 UTC): Added comments from Senator Elizabeth Warren.
