TLDR
- Senate bill restricts interest payments on stablecoins held by digital asset providers
- DeFi Oversight Appears for First Time in Senate Crypto Market Bill
- New rules exclude network tokens like SOL and LINK from securities status
- Lawmakers can file amendments to the 278-page bill until Tuesday evening
The US Senate has released a new bill that could shape the future of cryptocurrency regulation, focusing on stable coin yields, DeFi oversight and agency authority. The bipartisan effort sets clearer rules for stablecoins and digital asset platforms while introducing protections for decentralized finance developers.
Stablecoin Rewards Restrictions Draw Industry Attention
The bill, titled the Digital Asset Market Clarity Act, introduces a key restriction on stablecoin rewards. It states that digital asset service providers cannot pay yield or interest “solely in relation to holding a payment stablecoin.” However, rewards related to activities such as transactions are allowed under the bill.
This part of the bill represents a compromise reached after weeks of debate between lawmakers, banks and crypto companies.
Democratic Sen. Angela Alsobrooks proposed a middle-of-the-road approach to preserving the traditional deposit-based model used by community banks. According to a source close to the negotiations, companies like Coinbase saw this compromise as a productive way forward.
DeFi recognized in a separate monitoring category
For the first time, decentralized finance (DeFi) appears in its own oversight section in a Senate bill on crypto market structure. The language suggests that DeFi is treated as a separate category, which was not the case in previous versions.
The bill incorporates parts of the Blockchain Regulatory Certainty Act, introduced earlier by Senators Cynthia Lummis and Ron Wyden.
Although developers in the DeFi space initially expressed concern that protections could be reduced, some safeguards remain in the project. Industry sources say the updated language does not erase developer protections, although these are considered weaker than those in previous proposals.
Definitions of ancillary assets and network tokens have been refined
The draft reintroduces the term “ancillary asset”, used to describe certain digital assets not classified as securities. This term appeared in previous Senate versions but was not included in the House version, which could lead to negotiations between the two chambers.
The bill also states that network tokens, including those in exchange-traded funds (ETFs), will not be treated as ancillary assets or securities.
This would apply to cryptocurrencies like Solana (SOL), XRP and Chainlink’s LINK, which are included in ETFs. This classification could affect how federal regulators approach enforcement and compliance.
Bill moves forward despite tight deadlines and ongoing negotiations
The draft was released shortly after midnight by Senate Banking Committee Chairman Tim Scott, starting a short countdown for lawmakers to review it and propose amendments. Senators must submit any changes by Tuesday evening, ahead of the committee’s markup hearing scheduled for Thursday.
In a letter to Chairman Scott, Senators Jack Reed, Tina Smith and Chris Van Hollen requested more time for the review.
“We should not be asked to take such a vote without sufficient time to analyze and revise the text,” they wrote.
Meanwhile, the Senate Agriculture Committee postponed its own review of similar legislation. Both committees must advance their versions before the bill can reach the full Senate for consideration. The current draft could continue to change before final votes are held.
