Senators File 100+ Amendments to Crypto Bill on Stablecoins

Members of the Senate Banking Committee filed more than 100 amendments to a crypto market-structure bill ahead of a markup scheduled for Thursday. The proposed changes focus on limits for stablecoin yields, legal protections for software developers and ethics restrictions for officials and lawmakers.

Democratic senators submitted dozens of the amendments while Republicans offered narrower revisions. Committee members will consider the package during the markup as they seek to decide whether to advance the measure to the full Senate.

A central dispute centers on restrictions that would bar third-party platforms, including crypto exchanges, from offering yield on stablecoins that regulators view as equivalent to interest on a bank deposit. A draft of the bill would prohibit yield that is “functionally equivalent” to bank interest. Senators Jack Reed and Tina Smith introduced an amendment that would replace that test with a “substantially similar” standard, which would broaden the scope of banned activity.

Ethics proposals are also prominent. Senator Chris Van Hollen filed an amendment that would bar the president, vice president, senior executive branch officials, members of Congress and their families from owning, promoting or affiliating with crypto assets. The provision has drawn support from lawmakers on both sides of the aisle who have raised concerns about conflicts of interest.

Senator Catherine Cortez Masto proposed an amendment to create a safe harbor from criminal liability for software developers who do not register as money transmitters. The measure is intended to address concerns that developers of open-source code could be treated the same as businesses that handle customer funds.

Other amendments address sanctions, how banks and fintech firms may engage with crypto assets, and law enforcement. Senator Andy Kim offered an amendment to reestablish the Justice Department’s National Cryptocurrency Enforcement Team, which was disbanded in April 2023.

The bill would divide oversight of crypto markets among federal regulators, an issue that has split industry groups, banks and consumer advocates. The House approved a version of the legislation last summer under the CLARITY Act name. A previous Senate Banking Committee markup was delayed in January after a major crypto lobby withdrew support.

Republicans hold the committee majority and control the Senate, but leaders would need some Democratic support and 60 votes to overcome a filibuster and move the bill to final passage. Several Republicans, including Senator Thom Tillis, have said they will not back the measure without further changes.

Committee staff will review the filed amendments during the markup. The committee’s decisions on stablecoin yield limits, developer protections and ethics rules will shape whether and how the bill proceeds to the Senate floor.