Crypto Advocates Push for Stablecoin Rewards as Senate Market Structure Bill Nears Key Vote

The U.S. Senate Banking Committee will vote on a key market structure bill for cryptocurrencies on January 15, moving a major legislative effort forward after months of delays. The bill aims to establish federal regulatory boundaries for digital assets and was previously stalled due to unresolved issues like stablecoin yields and decentralized finance (DeFi) oversight according to crypto advocates.

Stablecoin rewards have become a central topic in the debate, with crypto industry leaders defending them as necessary for innovation and competition as reported. Coinbase's Faryar Shirzad and other industry representatives argue that banning stablecoin rewards would undermine U.S. leadership in the digital asset space and give an edge to countries like China according to industry analysis.

Community banks and the American Bankers Association have pushed back, warning that stablecoin yields could siphon deposits away from traditional lending channels as banks warn. They argue such rewards threaten credit availability for local businesses and families, citing a potential $6.6 trillion risk to bank deposits according to banking data.

Why Did Stablecoin Rewards Become a Focal Point?

The issue of stablecoin yields has intensified as the bill approaches a vote. The GENIUS Act, passed in mid-2025, barred stablecoin issuers from directly paying interest on their tokens, but companies have used affiliated exchanges to offer rewards to users as industry reports indicate. This has created a regulatory gray area that both sides are now seeking to clarify.

Industry advocates argue that stablecoin rewards are a necessary tool for customer acquisition and merchant adoption according to crypto industry leaders. They claim parity with banks is essential to avoid stifling innovation. Crypto firms like Coinbase are already offering yield-like returns to users who hold stablecoins on their platforms as Coinbase reports.

How Do Banking and Crypto Groups Differ in Their Views?

Banks have raised concerns that stablecoin yield programs undermine their role in the financial system. They argue that by offering interest, stablecoins compete unfairly with traditional bank deposits and could discourage consumers from using local banks according to bank analysis. This has led to lobbying efforts to close perceived loopholes in the GENIUS Act as lawmakers note.

Conversely, crypto industry leaders maintain that banning such rewards would hinder the sector's growth. Faryar Shirzad, for example, has warned that China is already experimenting with interest-bearing digital currency, and the U.S. risks falling behind according to industry experts.