U.S. Senate's New Draft Bill Targets Stablecoin Staking Income, Cryptocurrency Regulation Faces New Turning Point

The U.S. Senate Banking Committee has achieved a major breakthrough in stablecoin regulation. According to the recently released bipartisan draft, users will no longer be able to earn any form of interest or rewards from idle stablecoins held in their accounts in the future. This new version of the “Cryptocurrency Market Structure Act,” led by Senate Banking Committee Chairman Tim Scott, marks a fundamental shift in the regulatory stance toward digital asset yield models.

Stablecoins Idle and Unprofitable: How the New Bill Redefines the Rules

The core restriction in the new draft stipulates that digital asset service providers cannot offer any rewards to users who “simply hold payment stablecoins.” This regulation aims to close what the banking sector calls a regulatory loophole—while the GENIUS Act passed in July 2025 prohibits stablecoin issuers from directly paying interest, it failed to restrict platforms like Coinbase from bypassing these restrictions to offer rewards to users.

However, the new draft also leaves room for industry operations. If yields or rewards are directly linked to specific activities, such as trading, staking, providing liquidity, or collateralizing, they are not prohibited. This compromise stems from Democratic Senator Angela Alsobrooks’s proposal, who sought to draw clear regulatory red lines while preserving the operational flexibility necessary for the industry. Under this logic, exchanges can offer stablecoin yields when users perform specific actions, but funds that are simply held in static accounts will not earn any rewards.

Why Are Banks and Cryptocurrency Exchanges at Odds?

The release of this new draft is driven by fierce industry debate over stablecoin yield issues. The banking sector believes that existing loopholes have been fully exploited and must be closed through clear legislation. Cryptocurrency companies, on the other hand, argue that the issue was already addressed during the negotiations of the GENIUS Act and accuse banks of attempting to limit competition through new legislation. Coinbase has even issued warnings that if the legislation overly restricts reward programs, it may consider withdrawing support for the entire bill.

The core disagreement lies in differing industry perspectives on the nature of stablecoins. Banks view stablecoins as quasi-deposit products subject to traditional financial regulation; the crypto industry argues that stablecoins are merely payment tools, and yield policies should be market-driven. This new draft attempts to strike a middle ground.

Developer Immunity, Lack of Ethical Clauses: The Price of Compromise

The draft also incorporates proposals from Senators Cynthia Lummis and Ron Wyden. This clause explicitly excludes software developers and infrastructure providers (such as miners or node operators) from being classified as “financial intermediaries,” ensuring they are not subject to additional compliance obligations for writing open-source code. This protection is considered vital for the open-source community.

Notably, the draft does not include any ethical restrictions concerning President Trump and his family’s cryptocurrency ventures. According to Bloomberg estimates, Trump’s family has profited approximately $620 million through projects like World Liberty Financial. Some Democratic members had strongly lobbied to include conflict-of-interest restrictions, but moderate party members like Senator Ruben Gallego warned that overly aggressive ethical clauses could derail the entire bill. Ultimately, a compromise was reached.

Bipartisan Coordination Imminent: How Many More Twists Does This Bill Have?

The announced draft is seen as a crucial step forward, paving the way for formal review by the Senate Banking Committee this week. Meanwhile, the Senate Agriculture Committee has postponed a related hearing originally scheduled for soon, citing the need for more time to gather input from all parties.

Procedurally, the versions passed by the Banking and Agriculture Committees must be reconciled before being sent to a full Senate vote. Afterwards, lawmakers will also need to address the House version of the “Digital Asset Market Clarity Act”—which has already passed the House in earlier stages. Ultimately, this important legislation regulating the cryptocurrency industry must be approved by both chambers before being signed into law by President Trump. The entire process remains uncertain, with negotiations among regulators, industry stakeholders, and Congress members inevitable.