U.S. Senators Propose Ban on Stablecoin Yields in Bipartisan Crypto Bill

Two U.S. senators have reached a bipartisan agreement to prohibit crypto firms from offering yields on stablecoin holdings, marking a significant development in the Digital Asset Market Structure bill. The provision explicitly bars interest payments resembling traditional bank deposits, with limited exceptions for transaction-based rewards programs.

Industry reactions remain divided. While Blockchain Association executive Summer Mersinger called the language "a step in the right direction," trade groups warn the regulatory vacuum continues driving innovation offshore. The Treasury and CFTC must draft implementation rules within one year of enactment.

The bill underscores growing institutional scrutiny of crypto's shadow banking features. By targeting yield-bearing stablecoin products, lawmakers aim to create clearer boundaries between traditional finance and digital asset markets—potentially reshaping business models for exchanges and DeFi platforms alike.