Author | Oluwapelumi Adejumo
Compiled by Saoirse, Foresight News
Original link:
https://www.techflowpost.com/zh-CN/article/30717
The legislation, supported by the president and aimed at establishing more comprehensive regulatory rules for the U.S. cryptocurrency market, is nearing its congressional political deadline. Meanwhile, the banking industry is pressuring lawmakers and regulators to prohibit stablecoin companies from offering returns similar to bank deposit interest rates.
This debate has become one of the most central unresolved issues on Washington's crypto agenda. The crux of the dispute lies in whether stablecoins pegged to the US dollar should focus on payment and clearing functions, or whether they can add investment attributes to compete with bank accounts and money market funds.
The Senate's market structure bill, the "CLARITY Act," has stalled due to the breakdown of negotiations surrounding so-called "stablecoin yields."
Industry insiders and lobbyists say that late April to early May would be the actual window of opportunity for the bill to move forward if the election year schedule is to be realistically passed.
Congressional Research Service makes legal disputes more acute
The Congressional Research Service defines this issue more narrowly than the scope of public debate.
In a report dated March 6, the Congressional Research Service noted that while the GENIUS Act prohibits stablecoin issuers from paying returns directly to users, it does not fully clarify the legality of what it calls the "three-party model"—where intermediaries such as exchanges act between issuers and end users.
The Congressional Research Service states that the bill's lack of a clear definition of "holder" leaves room for debate regarding whether intermediaries can still transfer economic benefits to clients. This ambiguity is the core reason why the banking industry hopes Congress will clarify this in a more comprehensive market structure bill.
The banking industry believes that even limited incentives could make stablecoins a strong competitor to bank deposits, with a particularly strong impact on regional and community banks.
However, crypto companies believe that incentives linked to payments, wallet usage, or online activity can help the digital dollar compete with traditional payment channels and potentially enhance its position in the mainstream financial sector.
This disagreement also reflects the different understandings of the two sides regarding the future development of stablecoins.
The infographic shows that as the use of digital dollars continues to expand, banks and crypto companies have serious disagreements on the question of "who should get the stablecoin profits".
If lawmakers primarily view stablecoins as a payment tool, then the rationale for imposing stricter restrictions on related rewards will be stronger. Conversely, if lawmakers see them as part of a major transformation in how value is transferred on digital platforms, then the argument for limited incentives will be more tenable.
The banking association has urged lawmakers to close what they call a "regulatory loophole" before such reward mechanisms become more widespread. Banks argue that allowing rewards for idle balances could lead depositors to withdraw funds from banks, thereby weakening their core source of funding for lending to households and businesses.
In January, Standard Chartered Bank estimated that stablecoins could draw about $500 billion in deposits from the US banking system by the end of 2028, with small and medium-sized banks bearing the greatest pressure.
The infographic compares why banks and cryptocurrencies are concerned about stablecoin legislation, showing deposit outflows, the impact on lenders, cash-back incentives, and bank protectionism.
The banking industry is also trying to demonstrate to lawmakers that its stance has public support. The American Bankers Association recently released the results of a poll:
When the question raised the possibility that "allowing stablecoin yields could reduce the amount of money banks can lend and impact community and economic growth," respondents voted 3 to 1 in favor of Congress banning stablecoin yields.
• A 6:1 ratio suggests that legislation related to stablecoins should be approached cautiously to avoid disrupting the existing financial system, especially community banks.
However, the crypto industry countered that the banking sector was simply trying to protect its own funding model by limiting competition in the digital dollar.
Industry figures, including Coinbase CEO Brian Armstrong, believe that under the GENIUS Act, stablecoin issuers face stricter reserve requirements than banks—stablecoins must be fully backed by cash or cash equivalents.
The increased trading volume has boosted Washington's bargaining power.
The sheer size of the market has made this battle over profits no longer a niche issue.
The Boston Consulting Group estimates that the total circulation of stablecoins last year was about $62 trillion. After excluding bot trading, internal exchange transactions, and other activities, the real economic activity was only about $4.2 trillion.
The huge gap between apparent transaction volume and actual economic use also explains why the debate over "returns" has become so crucial.
If stablecoins remain primarily a clearing tool for transactions and market structures, lawmakers are more likely to limit them to payment instruments; however, if the yield mechanism transforms stablecoins into a widely used cash storage tool in user apps, the pressure on banks will increase rapidly.
To this end, the White House attempted to broker a compromise earlier this year: allowing partial returns in a few scenarios such as peer-to-peer payments, but prohibiting idle funds from generating returns. Crypto companies accepted this framework, but the banking industry rejected it, leading to a complete deadlock in Senate negotiations.
Even if Congress does not act, regulators may step in to tighten revenue models.
In a proposed rule to implement the GENIUS Act, the U.S. Office of the Comptroller of the Currency (OCC) stated that if a stablecoin issuer provides funding to an affiliate or third party, and then that affiliate pays returns to stablecoin holders, it will be considered as distributing prohibited returns.
This means that if Congress fails to set the tone through legislation, the executive branch may define the boundaries itself through regulatory rules.
With little time remaining in Congress...
The current game theory is divided into two lines:
Congress debated whether to resolve the issue through written law;
Regulatory bodies define the boundaries of corporate behavior within the existing legal framework.
For Senate bills, time itself is the biggest pressure.
Alex Thorn, head of research at Galaxy Digital, wrote on social media:
If the Clarity Act fails to pass committee review by the end of April, its chances of passing in 2026 will be extremely low. The bill must be sent to the full Senate for a vote in early May. Legislative time is running out, and with each passing day, the probability of passage decreases by one point.
He also cautioned that even if the revenue dispute is resolved, a breakthrough in the bill remains uncertain:
Currently, it is widely believed that the controversy surrounding stablecoin yields is holding back the CLARITY Act. However, even if a compromise is reached on the yield issue, the bill is still likely to face other obstacles.
These obstacles may include decentralized finance regulation, regulatory authority, and even ethical issues.
Crypto regulation is likely to become a major political battleground ahead of the November midterm elections. This makes the current impasse more urgent—delays in legislation will lead to a more crowded political schedule and a more challenging legislative environment.
The forecasting market also reflects this shift in sentiment. In early January, Polymarket gave the bill an approximately 80% chance of passing; after recent setbacks (including Armstrong's statement that the current version is unworkable), the probability has dropped to close to 50%.
Kalshi data shows that the bill has only a 7% chance of passing before May and a 65% chance of passing before the end of the year.
The failure of the bill will give more decision-making power to regulators and the market.
The impact of the failure extends far beyond the dispute over profits. The core purpose of the CLARITY Act is to define whether crypto tokens belong to securities, commodities, or other categories, providing a clear legal framework for market regulation.
If the bill stalls, the industry will become more reliant on regulatory guidance, temporary rules, and future political changes.
This is one of the reasons why the market is paying close attention to the fate of the bill. Bitwise Chief Investment Officer Matt Hougan said earlier this year that the CLARITY Act would enshrine the current favorable regulatory environment for crypto into law; otherwise, the government may reverse existing policies in the future.
He wrote that if the bill fails, the crypto industry will enter a period of "proving itself," requiring three years to become indispensable to the general public and traditional finance.
Under this logic, the industry's future growth will depend less on the expectation of "legislative implementation" and more on whether stablecoins, asset tokenization, and other products can truly achieve large-scale implementation.
This leaves the market with two drastically different paths:
• Bill passed → Investors pre-price the growth of stablecoins and tokenization;
• The bill failed → Future growth will depend more on actual adoption, while facing uncertainty about a shift in Washington's policy direction.
The flowchart shows the countdown to the Senate's decision on stablecoins, with deadlines of March 6 and late April or early May leading to two paths: if Congress takes action, it will bring regulatory clarity and faster growth; if Congress fails to take action, uncertainty will follow.
At this stage, the next decision rests with Washington. If senators can reinstate the market structure bill this spring, they can still define for themselves the extent to which stablecoins can transfer value to users and the scope of a crypto regulatory framework that can be codified into law. If not, regulators are clearly prepared to define at least some of the rules themselves.
Regardless of the outcome, this debate has long since transcended whether stablecoins belong to the financial system, delving into how stablecoins will operate within the system and who will benefit from their development.
