A bipartisan effort to bridge the divide between Wall Street and the digital asset industry could see a breakthrough as early as this week.
Summary
- Senator Thom Tillis plans to release a draft agreement this week aimed at resolving the dispute between banks and crypto firms over stablecoin interest payments.
- The proposed language for the Clarity Act seeks to settle whether digital asset companies can offer rewards on idle balances after banks voiced concerns regarding deposit drains.
Politico reports that Senator Thom Tillis (R-N.C.) is preparing to unveil a draft agreement aimed at settling the fierce debate over stablecoin yields.
Working alongside Senator Angela Alsobrooks (D-Md.), Tillis has been refining language for the Clarity Act, a piece of legislation intended to set a regulatory framework for the crypto sector.
The primary sticking point remains whether digital asset firms should be permitted to pay interest on idle stablecoin balances, a practice banks claim threatens their deposit base.
“I think the language has come together well,” Tillis stated on Monday, noting that a public release depends on the continued success of ongoing discussions.
Banking representatives have already expressed concerns regarding the latest proposal from the two senators. Traditional lenders argue that high-yield stablecoin products could pull liquidity out of the banking system, creating instability.
Conversely, crypto platforms like Coinbase argue that a ban on rewards would hinder growth and ignore the potential for banks to participate in these new markets.
While the GENIUS Act, passed last year, prohibited stablecoin issuers from paying interest directly, it left a loophole for third-party exchanges to offer yields, which the Clarity Act now seeks to address.
The White House has attempted to mediate the standoff through several private meetings since January, yet both sides have remained firm in their views.
Senator Tillis has suggested hosting a “crypto-palooza” on Capitol Hill, bringing both factions together in a public forum to force a resolution.
Even if a compromise is reached, the bill faces a steep climb through the Senate Banking and Agriculture Committees before it can reach the floor for a final vote.
