Bernstein says window for crypto market structure bill is ‘here and now,’ as concerns over stablecoin rewards remain key sticking point

Bernstein said the opportunity to pass a U.S. crypto market structure bill is rapidly narrowing, as lawmakers confront a deepening dispute between banks and the crypto industry over stablecoin rewards.

In a note to clients on Monday, analysts led by Gautam Chhugani said the bill’s prospects hinge less on technical questions around token classification and more on whether Congress can resolve opposition from banking groups concerned about deposit flight.

The Digital Asset Market Clarity Act of 2026, or “Clarity Act,” aims to establish a comprehensive framework for the U.S. crypto market structure by dividing oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, classifying most tokens as digital commodities rather than securities. The bill also establishes a CFTC framework for digital commodity exchanges, exempts crypto platforms from registering as national securities exchanges, and subjects decentralized protocols only to anti-fraud rules. Additionally, it aims to bring crypto activity back onshore and make U.S. token listings easier.

The bill already cleared the House last July and is now being drafted in the Senate, with markup sessions expected this week and the administration targeting final approval before the end of the first quarter. In the Senate, the Banking Committee is responsible for the securities-law half of the bill, while the Agriculture Committee works on the commodities-law half, with both publishing drafts in the fall. Before the legislation can advance, both committees must hold a markup — a formal session where lawmakers vote on amendments and decide whether to send the bill to the full Senate for a vote.

Stablecoin rewards fault line

Although there has been debate over core elements of the Clarity Act, including how digital commodities are defined versus securities and how decentralized finance is treated, those issues are unlikely to delay its progress, Bernstein said.

According to the analysts, the central obstacle is a push by banking representatives to restrict crypto platforms from offering rewards on stablecoin balances. While the stablecoin-focused GENIUS Act, which was signed into law by President Trump last year, barred stablecoin issuers from paying yield directly, it left room for crypto platforms and affiliates to share rewards with users, often in the 2% to 4% range per annum.

Banks view those incentives as a threat to traditional deposits, as the stablecoin market potentially grows from over $275 billion today into the trillions of dollars and becomes “systemically important,” the analysts said. The crypto industry argues that reopening the issue would undermine the GENIUS Act’s hard-won legislative compromise and is anti-competitive and anti-free markets, they added.

Both sides treat the issue as a red line, according to the analysts, raising the risk of delays or failure if a compromise is not reached soon. Bernstein added that political timing matters, arguing that the bill must advance by the second quarter of 2026 at the latest to avoid being overtaken by midterm election dynamics. The firm said the Trump administration’s pro-crypto stance gives the industry an advantage, but warned that momentum could still stall if the rewards debate drags on. The window is “here and now,” Chhugani said.

Coinbase’s stance underscores broader tension

The debate intensified earlier on Monday after a Bloomberg report said Coinbase may reconsider its support for the crypto market structure bill if it imposes broader limits on stablecoin rewards.

According to the report, Coinbase has stepped up lobbying efforts as lawmakers prepare to unveil the Senate draft, arguing that platform-based rewards are critical to competition and its business model.

Coinbase Chief Policy Officer Faryar Shirzad previously argued that limiting rewards on stablecoins could give global rivals an edge in the digital currency race, citing China’s ongoing move to pay interest on its digital yuan.

Gautam Chhugani maintains long positions in various cryptocurrencies.

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