Senate Crypto Market Structure Bill Faces December Deadlock Over DeFi and Stablecoins
The post Senate Crypto Market Structure Bill Faces December Deadlock Over DeFi and Stablecoins appeared on BitcoinEthereumNews.com.
TLDR: Senate crypto market structure bill faces delays from stablecoin yield, conflicts, and DeFi disputes Banks push to expand GENIUS Act yield ban beyond direct issuer payments to close perceived loopholes DeFi developer protections emerge as non-negotiable requirement for industry support of legislation Traditional finance firms lobby to classify developers and validators as regulated intermediaries The Senate’s push to finalize crypto market structure legislation before the holidays is hitting major snags. Three unresolved disputes are threatening to delay the bill into 2025. Jake Chervinsky, who tracks crypto policy developments, outlined the obstacles in a recent thread. The stakes are high as the industry seeks long-term protection from regulatory uncertainty. Stablecoin Yield Ban Sparks Banking Sector Clash The GENIUS Act introduced a prohibition on stablecoin issuers paying interest or yield directly to holders. Banks negotiated this restriction earlier in the legislative process. However, the narrow wording of the ban has created tension between traditional finance and crypto stakeholders. The text does not address non-yield rewards or yield paid by third-party services. Banks view this as a loophole that undermines their competitive position. They are now pushing to expand the prohibition within the market structure bill. This amendment attempt has raised concerns about mission creep in legislation meant to focus on market structure rather than stablecoin specifics. The banking sector’s influence in Congress could sway enough senators to either kill the bill or force significant changes. Traditional financial institutions argue that any form of yield on stablecoins threatens their deposit base. Crypto advocates counter that third-party services should remain outside the scope of issuer restrictions. The House passed its version, the CLARITY Act, in July without these complications. Senate Banking and Agriculture committees are now working separately on securities and commodities law components. Neither committee wants to schedule a markup hearing until…
