Crypto companies, including Coinbase, are urging Congress to move forward with a major market structure bill known as the CLARITY Act as early as next week. The push follows the release of compromise language by senators aimed at resolving a dispute between banks and crypto firms over how and when rewards can be offered on stablecoins.

Stablecoin rewards at centre of debate

The proposal from Thom Tillis and Angela Alsobrooks seeks to restrict crypto companies from offering yield-like rewards simply for holding stablecoins. Banking groups have warned that such incentives could reduce deposits and limit the capital available for lending, according to CNBC.

At the same time, the proposal allows rewards if users actively spend or use stablecoins. This distinction forms a key part of the compromise as lawmakers attempt to balance innovation in digital assets with concerns raised by traditional financial institutions.

The debate over stablecoins has been viewed as the main hurdle in advancing the bill through the Senate Banking Committee, although other disagreements remain.

Crypto industry calls for quick action

The crypto industry has made the bill its top legislative priority. The White House under Donald Trump is also pushing for progress on the legislation.

Brian Armstrong welcomed the updated language and called for the Senate Banking Committee to move forward with a markup, which refers to the process of reviewing and voting on the bill.

Summer Mersinger said the legislation represents a step in the right direction and urged lawmakers to proceed without delay.

Banking groups raise objections

Despite the compromise, major banking organisations have criticised the proposal. Groups led by the American Bankers Association and the Bank Policy Institute said they are concerned that the language does not clearly prohibit the payment of yield or interest on stablecoins.

According to these groups, research shows that yield-earning stablecoins could reduce loans to consumers, small businesses and farms by one fifth or more. They stressed the need for clear and transparent restrictions to avoid such outcomes.

These concerns could affect support for the bill among Republican lawmakers, raising questions about whether a vote can proceed as planned.

Committee vote remains uncertain

The Senate Banking Committee has not yet scheduled an initial vote on the bill. Committee Chair Tim Scott said the panel is nearing consensus and is working towards a bipartisan markup in May.

However, it is unclear whether all 13 Republican members are ready to support the legislation. A planned vote earlier in January was cancelled due to a lack of agreement within the committee.

Tillis said he is satisfied with the current proposal and has encouraged Scott to move ahead with scheduling the vote.

Possibility of partisan vote

If concerns from the banking sector lead some Republicans to oppose the bill, a vote this month could face delays. At the same time, differences among Democrats continue on issues including ethics provisions.

Alsobrooks said she is satisfied with the agreement on stablecoin rewards but added that other parts of the bill require further compromise and improvement before she can support it.

Bernie Moreno said he hopes the bill will receive bipartisan support but does not expect it. He indicated that the legislation could pass the committee with support mainly from one party, with remaining concerns addressed at a later stage.