According to Politico, a fresh draft agreement that aims at resolving the stablecoin yields controversy in the Senate’s crypto market structure bill is reportedly facing opposition from both banking and crypto lobbyists. Senator Thom Tillis revealed on Monday his plan to make the proposal public this week in an attempt to break the deadlock that has kept the bill on hold since the House passed the CLARITY Act in July.
Draft Seeks Ban on Third-Party Stablecoin Yields
The disputed amendment would prohibit third parties, such as crypto exchanges, from providing stablecoin yield payments. Politico reports that the draft was given to banking and crypto groups earlier this month to get their comments and replies. The banks pushed back, referring to three people familiar with the discussion.
Tillis said, “I believe that the reason why the people are nervous is because they have not checked the main text. Moreover, the initiative is reflecting our real concerns about deposit flight when we are talking about yield.”
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Deposit Flight Risks vs. Core Crypto Revenue
Stablecoin yield is a major business for crypto platforms. The banking lobby argues that customers may pull deposits from their savings accounts if the payments made by third parties pose a yield risk to the banking system.
Senator’s market structure bill would define how the SEC and CFTC regulate digital assets, a type of legislation that the crypto industry has been pushing for under the Trump administration. Groups were not able to find a middle ground despite the three White House-mediated meetings.
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Tillis Open to Changes, Additional Meeting Possible
Tillis said that he is in favor of changing and that he understands the push-back: “That’s why we need to get to a mark that we are negotiating.” The panel has “made progress” on anti-evasion provisions but “is still working on” the enforcement language.
If the disagreement still exists, Tillis will broker a fourth mediated meeting. “If we’ve still got a disagreement either from the banking or from the crypto side – and there is some concern from crypto, too – then we are going to get the people in the room and call balls and strikes on the final pieces and see whether we can get a mark done,” he declared.
Also Read: Europe Issues 3 Warnings as Stablecoins Threaten Financial Stability and Euro Control
