Lawmakers and White House officials announced a tentative compromise Friday over contentious language in U.S. cryptocurrency legislation that addresses yield paid on stablecoins, a move that could break a months-long stalemate holding up the bill.
Sen. Thom Tillis (R-N.C.) and Sen. Angela Alsobrooks (D-Md.) worked with White House representatives to craft language aimed at resolving a specific dispute between traditional banks and digital asset companies over whether cryptocurrency exchanges should be permitted to pay yield to stablecoin holders through rewards programs, according to Politico.
"Sen. Tillis and I do have an agreement in principle," Alsobrooks said Friday. "We’ve come a long way. And I think what it will do is to allow us to protect innovation, but also gives us the opportunity to prevent widespread deposit flight."
The reported accord could enable the landmark crypto regulatory bill to move forward in the Senate Banking Committee within the coming weeks. The legislation has been stalled in committee since January, in part because lawmakers disagreed on how to treat stablecoin yield.
At the heart of the disagreement is whether crypto trading venues should be allowed to provide yield payments to holders of stablecoins. Both Tillis and Alsobrooks have voiced concerns in recent negotiations about warnings from Wall Street groups that allowing stablecoins to pay yield might encourage customers to pull deposits out of traditional bank accounts.
The language developed with the White House is intended to address those concerns while preserving space for innovation in the digital-asset sector, officials said in discussions reported Friday. If the arrangement holds, it would lift one of the principal barriers that has kept the bill from advancing since the beginning of the year.
Observers and stakeholders on both sides of the debate have focused on the potential interactions between bank deposit flows and incentive programs run by crypto platforms. The tentative deal reflects efforts by senators and the executive branch to narrow those tensions and find a middle ground that could carry bipartisan support in committee.
Details of the specific statutory language under discussion were not released in the reports, and negotiators indicate further work remains before a final text is circulated for committee consideration.
Reporter: Marcus Reed