Banks Push To Limit Stablecoin Rewards Ahead Of Senate’s CLARITY Act Markup

The proposed changes in the new crypto bill would bring yield-bearing stablecoins closer to the banking system, which could limit crypto platforms and decentralized finance applications.

• Senate Banking staff held calls with crypto leaders as banks push to tighten stablecoin yield rules, according to Sander Lutz.
• Proposals include limiting stablecoin rewards or requiring issuers to obtain an OCC bank charter.
• The debate comes ahead of the Senate Banking Committee’s Jan. 15 market structure markup.

On Friday, the Senate Banking staff allegedly held calls with crypto leaders as pressure grows to change stablecoin yield rules.

The Senate Banking Committee has allegedly been in talks with crypto leaders to build pressure to tighten how yield can be offered on dollar-backed stablecoins, as per a crypto policy reporter, Sander Lutz. Proposals under consideration include restricting yield to specific transaction-based activity or requiring issuers to obtain an Office of the Comptroller of the Currency (OCC) bank charter before offering yield.

As of now, stablecoin issuers and crypto platforms could offer yield without taking on the burden of being federally chartered banks, as long as they maintain reserves and publish certain disclosures. Changes now being discussed would effectively move yield-bearing stablecoins much closer to the traditional banking system, and that could restrict how crypto platforms and decentralised finance applications work.

In response to the issue, Mike Novogratz, Galaxy CEO, remarked, “Sad state that Congress cares more about banks' margins than they do consumers!  Both [Democrats] and [Republicans] need to ask who are the serving?”

Separately, an analysis shared by Galaxy Digital suggests negotiations are accelerating as lawmakers approach a decision point. Data compiled by Galaxy Research (GLXY) indicates that advancing the legislation out of committee would likely require unified Republican support and backing from a small number of Democrats, based on prior votes on the GENIUS Act and related crypto measures. 

Market Structure Markup Approaches

The negotiations are taking place ahead of a scheduled markup of comprehensive digital asset market structure legislation by the Senate Banking Committee on Jan. 15.

Committee Chairman Tim Scott has said the markup follows months of bipartisan work aimed at establishing a federal framework for regulating digital assets, including defining oversight for crypto markets and digital commodities. Senate Banking Republicans first released market structure principles in June 2025, followed by hearings, industry consultations, and multiple discussion drafts.

The outcome of the stablecoin yield debate is expected to influence how the broader market structure bill ultimately treats stablecoins and decentralized finance.

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