Sen. Tillis aims to release draft resolving Clarity Act's stablecoin yield dispute this week: report
U.S. Senator Thom Tillis (R-N.C.) said that he hopes to release a draft agreement this week to resolve the ongoing stablecoin yield dispute between banks and crypto firms, according to a Monday report from Politico.
Tillis has reportedly been working with Sen. Angela Alsobrooks (D-Md.) to develop language in the Clarity Act to end the long-standing debate on whether cryptocurrency companies should be allowed to pay interest on idle stablecoin balances.
"I think the language has come together well," Tillis told Politico on Monday, adding that the text may be publicly released later this week if discussions proceed smoothly.
The latest draft proposal from Tillis and Alsobrooks has been viewed by both banking and crypto representatives, and has drawn pushback from banks, according to the report, though the source of the criticism is unclear. Tillis reportedly indicated that he is willing to make further changes.
The debate over stablecoin rewards has become the most contentious issue in the Clarity Act, a long-sought bill to establish comprehensive rules for the digital asset sector. While the GENIUS Act, passed last year, stipulates that stablecoin issuers are banned from paying interest to holders, it does not ban third-party platforms, such as exchanges, from offering yield.
U.S. banks have argued that allowing such rewards would cause a major structural disruption, draining significant deposits away from traditional institutions. Crypto firms, namely Coinbase, have maintained that banning such rewards will stifle innovation and argued that it could provide new business opportunities for banks, not just crypto entities.
Since the beginning of the year, the White House has convened several closed-door meetings to facilitate a resolution, but no agreement has been reached as the two parties remain fixed in their positions.
The Clarity Act has a long way to go, even if banks and crypto firms land on an agreement. It has yet to pass a vote in the Senate Banking Committee, after which it will have to be reconciled with the Senate Agriculture Committee before going to a full floor vote.
Meanwhile, Senator Tillis also reportedly mentioned a possibility of a "crypto-palooza" to invite both banking and crypto representatives to Capitol Hill to discuss the stablecoin yield matter and resolve the standoff.
