**U.S. Senate Banking Committee Defers Crypto Regulation Hearing Amid Stablecoin Yield Dispute**

Galaxy research director Alex Thorn disclosed via X that U.S. Senate Banking Committee Chairman Tim Scott has pushed back the scheduled hearing on the cryptocurrency market structure bill. The delay underscores mounting tensions within legislative negotiations over how digital assets should be regulated.

**Stablecoin Yield Mechanisms at the Center of Disagreement**

The core obstacle hindering progress centers on whether stablecoins should be permitted to generate yield. Banking sector advocates have intensified efforts to prohibit interest-bearing features on stablecoins, concerned that such mechanisms could redirect capital flows away from traditional bank deposits and potentially destabilize the conventional financial system. This position directly conflicts with the stablecoin industry's interests—stakeholders within the sector view yield-generating capabilities as fundamental to their operational viability and competitive positioning.

Despite efforts to craft a middle-ground proposal that might satisfy legislative concerns, the stablecoin industry ultimately rejected the compromise framework as insufficient. Multiple participants within the sector have characterized this issue as existential.

**Outstanding Regulatory Challenges**

Beyond stablecoin compensation structures, lawmakers remain divided on several other matters. These include proposed restrictions on decentralized finance (DeFi) protocols, enhanced measures to combat illicit activity within the blockchain space, and guardrails on the tokenization of traditional securities. Each represents a distinct battleground in broader negotiations.

**Revised Timeline Suggests Late January Reconvene**

Though Chairman Scott has not formally announced a replacement hearing date, operational constraints provide some clarity. With the Senate entering recess the following week, the Banking Committee's earliest opportunity to reconvene with a revised hearing would likely fall within the January 26-30 window. Separately, the Senate Agriculture Committee—responsible for Commodity Futures Trading Commission (CFTC) matters—has scheduled its corresponding revised hearing for January 27.

These delays reflect the complexity of balancing innovation, financial stability, consumer protection, and competitive concerns within the regulatory framework governing cryptocurrency markets.