The U.S. Senate has released a new draft of the crypto market structure bill, specifically targeting the passive earning of interest on stablecoins. The draft, part of the ongoing GENIUS Act negotiations, prohibits digital asset service providers—including exchanges and custodians—from paying any form of interest or yield "solely in connection with the holding of a payment stablecoin."
The legislation, set for debate in the Senate Banking Committee on Thursday, aims to draw a clear line between passive holding and active participation. Under the proposed rules, rewards would only be permissible when tied to activities such as trading, staking, or providing liquidity. This compromise, led by Senator Angela Alsobrooks, is seen as a response to concerns from the traditional banking sector, notably the American Bankers Association, which views yield-bearing stablecoins as a competitive threat to conventional bank deposits.
The bill's language is designed to protect the business model of community banks while steering crypto users towards more active roles within decentralized finance (DeFi) ecosystems. Industry stakeholders, including CoinBase, have reportedly viewed this compromise as constructive, helping to resolve weeks of debate between the crypto sector and banking lobbyists.
Concurrently, the draft bill introduces a new regulatory framework for DeFi, though early reviewers note that protections for protocol developers appear weaker than in prior versions. The text includes oversight mechanisms but stops short of labeling developers as liable, leaving some room for innovation. The legislation also incorporates the Blockchain Regulatory Certainty Act and expands on the "ancillary asset" category, explicitly excluding "network tokens"—potentially including assets like XRP, Solana (SOL), and Chainlink (LINK)—from being classified as securities.
This stablecoin yield prohibition is part of broader 2026 crypto regulations under active review. Senators have until Tuesday evening to file amendments, with a key committee markup scheduled for Thursday. If passed, the changes could significantly reshape the U.S. stablecoin landscape, potentially reducing passive returns for holders while incentivizing greater activity on DeFi platforms.
