WASHINGTON — A new Senate proposal seeks to break the deadlock between cryptocurrency firms and traditional banks over stablecoin regulations, with Senator Thom Tillis (R-NC) preparing to introduce compromise legislation as early as this week. The bill aims to clarify yield-bearing stablecoin operations while addressing banking sector concerns, but early reactions suggest both sides remain skeptical.
The conflict centers on whether stablecoin issuers should be permitted to offer interest-like yields, a practice banks argue creates an unlevel playing field. Crypto advocates counter that existing regulations stifle innovation. Tillis’ office has reportedly been negotiating with both industries for months, though neither camp appears fully satisfied with the draft language.
Analysts note the proposal comes at a critical juncture, with the Treasury Department expected to release its own stablecoin recommendations next month. ‘This is Congress’ last chance to steer the conversation before executive agencies take the wheel,’ said a financial policy analyst familiar with the discussions, speaking on condition of anonymity.
If passed, the legislation would mark the first comprehensive federal framework for stablecoins, potentially preempting state-level regulations that have created a patchwork system. However, Senate Banking Committee staff caution that substantial revisions may be needed to secure enough votes for passage.