Crypto companies are offering new concessions aimed at unlocking stalled Senate negotiations over the US crypto market structure bill, according to a recent report. The proposals focus largely on stablecoins and attempt to address concerns raised by traditional banks, particularly around competition for deposits.
The legislation has already passed the House of Representatives but remains stuck in the Senate, where disagreements persist over whether stablecoin issuers should be allowed to offer yield or rewards to users. Banking groups argue that yield-bearing stablecoins could pull money away from savings accounts, while crypto firms say the innovation benefits consumers and the broader financial system.
Crypto Firms Propose Bigger Role for Community Banks
According to anonymous sources cited by Bloomberg, crypto firms are floating compromises that would expand the role of community banks within the stablecoin ecosystem. One idea would require stablecoin issuers to hold a portion of their reserves at community banks, potentially directing more capital toward smaller financial institutions.
Other proposals include partnerships that would allow community banks to issue their own stablecoins with the help of crypto firms. Supporters say this approach could reduce fears of deposit flight while modernizing banking infrastructure and giving smaller banks a competitive edge in digital payments.
A White House meeting earlier this week between crypto and banking representatives ended without a final agreement, but discussions are ongoing.
Senate Negotiations Continue as Lawmakers Seek Middle Ground
Senate Banking Committee Chairman Tim Scott said this week that allowing crypto firms to offer rewards is not inherently problematic, as long as they do not market themselves as traditional banks. Speaking on Fox News, Scott emphasized that consumer deposits are not expected to flee the banking system as a result of stablecoin adoption.
“There will not be a deposit flight,” Scott said, adding that further talks with consumer banks are planned. He also expressed optimism that both sides remain engaged and that the US can still position itself as a global leader in crypto innovation.
The Senate Agriculture Committee released a Republican draft of the market structure bill in January, and the measure advanced out of committee after a markup session on Jan. 29. However, the bill still lacks sufficient Democratic support to pass the full Senate, where at least seven Democratic votes will be needed.
Complicating matters, the Senate Banking Committee is working on a stricter version of the legislation. Both versions will need to be reconciled before the bill can move forward and ultimately reach President Trump’s desk for approval.
