WASHINGTON — U.S. senators are reportedly close to finalizing a draft deal on regulating stablecoin yields, despite strong pushback from banking lobbyists. According to sources familiar with the negotiations, the proposed legislation would impose restrictions on the interest payments associated with stablecoins, a move that has divided traditional financial institutions and cryptocurrency firms.
The White House has circulated internal data suggesting that banning yields on stablecoins would have little effect on broader lending markets, according to officials briefed on the matter. Analysts note that this finding undercuts one of the banking industry’s key arguments against the proposal.
“The banks see this as an existential threat to their deposit base,” said one financial policy analyst who requested anonymity to discuss sensitive negotiations. “But the data doesn’t show significant risk to lending capacity if stablecoin yields are restricted.”
Stablecoins, cryptocurrencies pegged to stable assets like the U.S. dollar, have grown into a $160 billion market. Some versions offer yields through various mechanisms, drawing comparisons to traditional bank accounts but without equivalent regulatory oversight.
The legislative effort comes as federal regulators increasingly focus on the crypto sector following several high-profile collapses. If passed, the bill could set important precedents for how digital assets are treated under U.S. law.
Looking ahead, observers suggest the proposal’s fate may hinge on whether lawmakers can bridge the gap between skeptical bankers and crypto advocates pushing for innovation-friendly rules. The outcome could significantly influence where and how stablecoins operate in the U.S. financial system.