Senator Tim Scott, chair of the Senate Banking Committee, expects a bipartisan compromise proposal on stablecoin yield provisions by the end of this week. That would address the central obstacle halting federal stablecoin regulation for months.
The dispute centers on whether issuers like Circle and Tether may pass interest earned on US Treasury reserves to token holders. Banks oppose yield-bearing stablecoins, citing competitive threats to deposits. Crypto advocates argue restricting yield protects bank margins at consumer expense.
A resolution could involve yield caps or licensing requirements-details remain unreleased. The stalled GENIUS Act, approved by the Senate Banking Committee earlier this year, hinges on this issue.
Stablecoin market capitalization exceeds $230 billion: USDT at $140 billion, USDC at $55 billion. Regulatory clarity-especially on yield-would accelerate institutional adoption and redefine competition with money market funds and savings accounts.
Scott has prioritized stablecoin legislation this Congress. A workable compromise signals momentum-not final passage-but confirms lawmakers are aligning on core definitions and trade-offs.