Senate Crypto Bill Stalls as Banks and Industry Reject Tillis's Stablecoin Compromise

Senator Thom Tillis is preparing to publicly release a draft agreement aimed at breaking a deadlock between banking and crypto lobbyists over stablecoin yield regulations, but both sides are already pushing back on the proposal, according to Politico. The stalemate has frozen progress on the Senate's crypto market structure bill—critical legislation that would define how the country's two major financial regulators oversee the sector.

The Stablecoin Yields Showdown

The core dispute centers on whether third parties like crypto exchanges should be allowed to offer stablecoin yield payments. Banks are lobbying hard to ban these payments outright, arguing that crypto platform yields siphon deposits from traditional savings accounts and pose systemic risk to banking. For the crypto industry, stablecoin yields represent significant revenue—making the ban a non-starter.

Tillis indicated the draft had already circulated among both camps earlier this month and drew criticism from banking representatives, according to three sources familiar with negotiations. "I think that people are apprehensive because they haven't seen the full text," Tillis told Politico on Monday. "Directionally, it has been instructed by what we consider to be the legitimate issues that we have around deposit flight when we're talking about yield."

This legislative tug-of-war has dragged on despite three separate White House-mediated negotiations between the groups. The Senate bill's passage is tied to momentum around crypto market intelligence and regulatory clarity that the industry has been pushing for under the Trump administration. Yet neither banks nor crypto firms are satisfied with current compromise language.

Progress on Some Fronts, Stalled on Others

Tillis acknowledged the proposal isn't final. He's signaling openness to revisions and suggested the negotiation process needs to continue. "That's why we need to get down to a mark that we're negotiating," he said.

The senator noted that the working group has "made progress" on anti-evasion provisions—language designed to prevent workarounds to stablecoin regulations. However, enforcement mechanisms remain unresolved. These details matter enormously for crypto trading and portfolio strategies: vague enforcement language could leave platforms in regulatory gray zones, while overly strict rules could cripple stablecoin functionality.

Both banking and crypto lobbyists have raised concerns to the senator's office about the latest proposal, with crypto representatives joining banks in expressing hesitation. That dual resistance signals the compromise may still be too restrictive for crypto or too lenient for financial institutions.

Fourth White House Mediation Looms

If negotiations break down again, Tillis said he'd broker a fourth White House-mediated session between the groups. "If we've still got a disagreement from either banking or crypto — and there's some concern out of crypto, too — then we're going to get the people in the room and call balls and strikes on the final pieces and see if we can get a mark done," he said.

This legislative limbo traces back to July, when the House passed the CLARITY Act on crypto policing. The Senate companion bill remains stalled pending resolution of the stablecoin yield language, making this one of the highest-stakes regulatory negotiations in crypto markets today.