Crypto bill negotiations enter critical week as lawmakers return amid pressure to resolve stablecoin rewards

Ahead of lawmakers’ return to Washington D.C. next week, negotiations over how to treat stablecoin rewards are intensifying, with the White House, senior cabinet officials, lawmakers, and stakeholders from the crypto and banking sectors all weighing in.

Reaching an agreement could help advance a broader cryptocurrency market structure bill aimed at regulating the industry. The legislation would clarify jurisdiction between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, establish rules for exchanges, and require disclosures.

Lawmakers will be descending back onto Capitol Hill next week, and the Senate Banking Committee, where the bill has been stalled, is planning to hold a hearing to vote on the bill before the end of the month. The treatment of stablecoin rewards has been the main blocker stopping the bill from moving forward in that committee over the past year.

The topic was addressed in the GENIUS stablecoin law, passed in July, which prohibits stablecoin issuers from paying interest directly to holders. However, it does not restrict third-party platforms, such as Coinbase, from offering rewards. Banking industry advocates argue that allowing such yields could draw deposits away from traditional institutions, potentially harming community banks. Crypto firms, meanwhile, contend that limiting rewards would stifle innovation.

The report 

Then came an anticipated report from White House economists that was released this past week, which found that stablecoin rewards are unlikely to meaningfully dent bank lending or broader credit conditions.

At the time of the report’s release, a banking source pushed back on their findings and said that they did not analyze or measure the negative impact stablecoin yield would have, if allowed, on bank lending, which they view as the main question in ongoing policy discussions. The source also countered that the economists focused on the impact of a full yield prohibition on banks, not whether community banks and bank deposits would generally be affected by stablecoin yield.

On Friday, the source told The Block that it is continuing to offer solutions to tighten yield prohibition language because of concerns about lending and economic growth.

Within the White House, top officials are continuing a concerted push to pass that broader crypto bill. On Wednesday, Treasury Secretary Scott Bessent penned an op-ed in The Wall Street Journal urging for passage of the bill. 

“Senate floor time is scarce, and now is the time to act,” Bessent said.

A separate source familiar with the discussions told The Block on Friday that the focus now seems to be on “getting the banks in line to support the compromise.”

“Seems crypto is nearly there,” the source said.

Other issues

Once stablecoin rewards are resolved, attention will turn to addressing issues such as ethics and protections for software developers. However, disagreements between crypto and law enforcement groups are starting to form on the latter issue, according to reporting from Politico.

On Friday, President Donald Trump’s top crypto adviser, Patrick Witt, reposted the article, adding that protecting software developers is ” one of the most important aspects of this bill.”

“It’s a core pillar of making the US the crypto capital of the world,” he said in a post on X. “Criminalizing code does nothing but drive innovation offshore.”

If a bill passes out of the Senate Banking Committee, it will still have to be reconciled with the Senate Agriculture Committee’s version before going to a full Senate floor vote, where 60 votes are needed and so needs Democratic buy-in and all Republicans on board. Then it would have to be married with the House’s version, which passed out of the full House last year.

After years of lawmakers trying to pass a crypto market structure bill — first the Financial Innovation and Technology for the 21st Century Act and later the Clarity Act — Sen. Cynthia Lummis signaled a breaking point. The crypto-friendly lawmaker has said she would not seek re-election later this year, so her term will end in January 2027.

“This is our last chance to pass the Clarity Act until at least 2030,” she said on Friday in a post on X. “We can’t afford to surrender America’s financial future.”

© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.