Compromise Bill Forbids Passive Stablecoin Interest, Sanctions Active Incentives
US senators have introduced a market structure bill that sharply limits stablecoin yield programs. The draft forbids rewards for inactive holdings but permits them when tied to concrete user actions, providing direction for the upcoming legislative markup.
The new bipartisan draft, released by Senate Banking Committee Chairman Tim Scott, is characterized as a negotiated piece of legislation. It targets one of the most disputed issues in recent talks that engaged both crypto firms and the banking industry.
Per the bill’s text, service providers would be banned from paying any interest or yield solely for a user’s possession of payment stablecoins. Allowances are made for activity-based rewards, including those for making transactions, staking, contributing liquidity, or offering collateral.
This formulation adopts a compromise floated last week by Democratic Senator Angela Alsobrooks, a central figure in the talks. Her concept permits crypto exchanges to grant yield for active use, like selling a stablecoin, but not for letting a balance sit unused.
