Senator Tim Scott said he expects a proposal this week to resolve a sticking point in the Senate’s crypto market structure bill: whether third parties can offer yield on stablecoins. Scott, chair of the Senate Banking Committee, made the comment at a crypto lobby event in Washington, D.C., saying, “I believe that this week we will have the first proposal in my hands to take a look at.” He added that if a proposal arrives before week’s end, “I think we’re going to be in much better shape.”
Lawmakers have been negotiating a Senate counterpart to the House-passed CLARITY Act. Progress has stalled primarily over a provision that would prohibit third parties from providing yield payments on stablecoins — a tool exchanges and other platforms use to attract customers. Banking industry groups argue those third-party yield programs sidestep the GENIUS Act’s ban on yield payments by stablecoin issuers and could encourage deposit migration away from banks, posing risks to financial stability. Crypto industry lobbyists counter that exchange-offered yields are competitive market offerings and have accused banks of seeking to limit competition.
Scott described the yield question as the “largest publicly celebrated challenge,” while noting other disputes remain. Lawmakers continue negotiating ethics provisions, decentralized finance (DeFi) language, and which types of companies and activities should be covered or exempted by the legislation. “Those issues seem to pale in comparison to the rewards issue, but they’re still very important outstanding issues that we are nibbling away at as we work on the more popular issue of rewards and yield,” he said.
Committee procedure complicates the path forward: the Banking Committee oversees the Securities and Exchange Commission (SEC) while the Senate Agriculture Committee has jurisdiction over the Commodity Futures Trading Commission (CFTC), so both panels are involved. The Banking Committee indefinitely postponed a markup of the bill in January, while the Agriculture Committee advanced its markup to the Senate floor that month. Scott said negotiators have made substantial progress recently and that momentum is building toward a compromise on the contested stablecoin yield language.