Senators Thom Tillis and Angela Alsobrooks unveiled a bipartisan compromise on stablecoin legislation, addressing concerns about deposit flight from banks by prohibiting rewards that resemble interest. Major banking trade groups immediately opposed the deal, while Circle Internet Group’s stock price surged nearly 20% following the announcement.
Two U.S. senators announced a bipartisan compromise on a key issue delaying federal cryptocurrency legislation. According to Senator Thom Tillis, the agreement directly addresses banking sector concerns about deposit flight by prohibiting stablecoin rewards from resembling interest on bank deposits. He stated that banks had been at the table throughout negotiations.
The proposal allows crypto companies to offer alternative customer rewards. A joint statement from five major banking trade groups, including the American Bankers Association, said the proposed language falls short. The group cited research suggesting yield-bearing stablecoins could reduce various loans by one-fifth or more and pledged to send detailed suggestions to lawmakers.
Senators Tillis and Alsobrooks said the deal was locked and told the banks they respectfully agree to disagree. Coinbase Chief Legal Officer Paul Grewal, who attended earlier White House meetings on this issue, commented on the situation. He wrote, “I must say I feel obligated to offer my congratulations to the banking trades. They’ve managed to do the impossible in our country these days: bring sensible Rs and Ds together.”
Markets responded to the news, with Circle shares closing at around $120, up from roughly $100 the previous session. This marks a sharp reversal from late March, when the stock dropped about 20% after earlier drafts raised concerns about a blanket ban on stablecoin yield. The latest compromise restricts interest-like payments but leaves room for other forms of rewards.
