Key senators and the White House have reached a tentative agreement on cryptocurrency legislation aimed at resolving a dispute between banks and digital asset firms over stablecoin yields, according to a Politico report.
The move could pave the way for a landmark crypto regulatory bill that has been stalled in the Senate Banking Committee since January.
Sen. Thom Tillis (RN.C.) and Sen. Angela Alsobrooks (D-Md.) said Friday they have “agreement in principle” on language aimed at balancing innovation and financial stability. The law seeks to prevent plans to reward stablecoins from triggering widespread withdrawals of deposits from traditional banks, a concern expressed by Wall Street groups.
“The agreement allows us to secure new material while giving us the opportunity to prevent widespread deposit flight,” Alsobrooks said. Tillis described the agreement as a positive step but noted the need to consult with industry stakeholders before finalizing the details.
Although the details of the agreement are not yet clear, early indications suggest that it could prevent payments to passive stablecoin balances. The tentative agreement marks progress towards an April vote on the crypto market structure bill, which could open the first major framework for digital asset regulation.
Crypto legal domain
The battle for the US crypto market structure bill stems from a broader effort to build on the landmark stablecoin law of 2025, the GENIUS Act, which established a government framework for stablecoins – requiring full support, transparency and withholding disclosure of digital dollars.
That law was widely seen in the crypto industry as a breakthrough in regulatory clarification while trying to align digital assets with traditional financial standards.
After the passage of the GENIUS Act, the Senate turned its attention to expanded oversight of digital assets with what is commonly referred to as the CLARITY Act or the crypto market structure bill.
The law aims to explain how US regulators police and oversee trading platforms, tokens, custodial services and other infrastructure – essentially the backbone of the regulated digital asset ecosystem.
However, the discussions were complicated by one central issue: whether regulated exchanges should be allowed to offer productive rewards for stablecoin holdings.
Banks and major financial institutions argue that these awards are similar to unregulated deposit products that could take funds out of FDIC-insured accounts, potentially jeopardizing lending and financial stability.
Crypto firms – including major issuers such as Circle and Coinbase – argue that such incentives are essential for competitive markets and user acceptance of the digital currency.
A deal currently being negotiated between senators and the White House seeks a middle ground — one that would allow for performance-based rewards while limiting the idle harvest — in hopes of opening Senate committee action in April. Whether that compromise holds both banking and crypto support will be decisive for the future of US digital asset regulation.
