Senator Thom Tillis plans to release a draft agreement this week aimed at resolving a key dispute in the Senate’s crypto market structure bill. The stalemate centers on a provision to ban third-party stablecoin yields, a major business for crypto platforms that banks argue threatens deposit flight. Both banking and crypto lobbyists have already expressed concerns about the unpublished draft, prompting further negotiations.
Bank and crypto lobbyists have both relayed concerns over the latest proposal to end the stalemate on stablecoin yields in the Senate’s crypto market structure bill. This legislation has been in limbo since the House passed the CLARITY Act in July.
Senator Thom Tillis told Politico on Monday that he plans to publicly release a draft agreement this week. The proposal aims to end a fight over a provision that would ban third parties, such as crypto exchanges, from offering stablecoin yield payments.
The draft had already been seen by banking and crypto representatives earlier this month. According to three people with knowledge of the matter, it drew pushback from the banks.
“I think that people are apprehensive because they haven’t seen the full text,” Tillis said. “Directionally, it has been instructed by what we consider to be the legitimate issues that we have around deposit flight when we’re talking about yield.”
The Senate’s crypto market structure bill would outline how the country’s two major market watchdogs would regulate the sector. However, the bill’s progress has been stalled as banking and crypto groups have been at odds over language banning stablecoin yields.
Stablecoin yields are a major business for crypto platforms. The bank lobby wants to outlaw third-party payments, arguing it is a risk to the banking system as customers may pull deposits out of savings accounts.
Tillis said he was open to making changes to the proposal and was aware of the pushback. “That’s why we need to get down to a mark that we’re negotiating,” he stated.
He added the group had “made progress” on anti-evasion provisions but was “still working on” language around enforcement. Tillis said he would look to broker another meeting with the bank and crypto groups if they still can’t agree on a way forward.
