Senate draft bars passive stablecoin yields, a potential boost for banks

Beincrypto reports the full text of the Senate’s 278-page virtual asset market structure bill restricts passive stablecoin yields, barring companies from paying interest solely for holding stablecoin balances and allowing rewards only when tied to active on-chain use such as staking, liquidity provision, transactions, posting collateral, or participating in network governance.

The draft’s yield rule means retail users who previously earned passive yields similar to bank deposits may face new barriers while banks retain their traditional ability to pay interest on deposits, a dynamic the bill’s critics say could tilt competition toward traditional banks.

The legislation also advances token clarity and DeFi guardrails, treating XRP, SOL, LTC, HBAR, DOGE, and LINK on par with BTC and ETH under ETF classifications, and includes compromise language to protect non-controlling software developers and limit regulatory arbitrage between DeFi and TradFi.

Key Topics

Crypto, Stablecoin Yields, Defi, Staking, Us Senate, Cynthia Lummis