Stablecoin Yield Dispute Stalls US Crypto Legislation, Industry Frustration Grows

On March 28th, divisions within the US crypto industry regarding stablecoin yields continued to escalate, becoming the core bottleneck hindering overall legislative progress. Multiple sources indicate that despite recent circulation of draft texts of relevant clauses in Congress, negotiations have not achieved substantial breakthroughs. Jason Somensatto, Director of Policy at Coin Center, stated that the issue of stablecoin yields is the “main obstacle” to the advancement of the current crypto market structure bill, and that if this issue is resolved, other clauses may be quickly agreed upon. The focus of the dispute lies in whether stablecoins will be allowed to offer yields to holders. The previously passed GENIUS Act prohibits issuers from directly paying interest to users but does not restrict third-party platforms from offering rewards. The banking industry is concerned that this move will divert deposits, while the crypto industry believes that restricting yields will stifle innovation. During the negotiation process, Coinbase has faced criticism for raising objections to certain clauses, being accused of “dragging down the bill’s progress.” Its CEO, Brian Armstrong, had previously opposed designs that could “kill stablecoin yields” and expressed concerns about regulatory jurisdiction and DeFi clauses. The White House has convened multiple meetings between banks and the crypto industry for consultations, but consensus has yet to be reached. Industry insiders point out that negotiations have gone through repeated rounds without results. If delays continue, the bill may not even enter the Senate committee for a vote, carrying the risk of “abortion.” Despite this, the market still holds some expectations for progress. Coinbase has stated that the industry is preparing to jointly propose an alternative solution to resolve the yield clause dispute within the coming weeks.