A dispute over whether stablecoin issuers and platforms should be allowed to offer user rewards is complicating negotiations around the U.S. Senate’s crypto market structure legislation. After Wall Street banks circulated a document arguing for a blanket ban on stablecoin yield, crypto industry group the Digital Chamber produced its own principles paper framing rewards as acceptable in narrower contexts—particularly when tied to activity such as liquidity provision or ecosystem participation.

Key points

- Banks argue stablecoin yield threatens core bank deposit-taking and want a total prohibition.

- The Digital Chamber says it can accept restrictions on ‘interest-like’ payments for simply holding stablecoins, but wants room for rewards tied to transactions or DeFi-style participation.

- The group says a proposed two-year study on stablecoins’ impact on deposits could be acceptable if it doesn’t trigger automatic rulemaking.

Why it matters

Stablecoins sit at the center of crypto’s payment and DeFi plumbing. How lawmakers treat yield and rewards will shape product design at exchanges, wallets, and on-chain protocols—and may determine whether stablecoins compete directly with bank deposits or stay closer to payments instruments.

What to watch

Negotiations are under time pressure, with the White House reportedly pushing for compromise. The final wording around ‘idle yield’ versus activity-based rewards could decide whether major U.S. platforms support the bill or fight it.

Source: CoinDesk