Tim Scott says stablecoin yield dispute nears resolution in Senate talks

Senate Banking Chair Tim Scott expects to receive a compromise proposal this week on rules governing yield payments tied to stablecoins, an issue that has stalled the Senate’s crypto market structure bill.

Speaking at The Digital Chamber’s DC Blockchain Summit in Washington, D.C., Scott said negotiators are close to a deal on how to handle yields tied to stablecoins. He expects to receive a first proposal to review this week. If it arrives by week’s end, he added, the bill will be in a much stronger position.

The Senate package has been held up by a provision that would prohibit third parties, such as crypto exchanges, from offering yields on stablecoin holdings. Banking groups argue that these yields exploit a gap in the GENIUS Act, which banned yield payments by stablecoin issuers, and could pull deposits from banks. Industry advocates contest those claims and argue that banning third-party yields would disadvantage exchanges and their customers.

Scott called the yield question the most visible hurdle facing the bill. He said there’s also progress on ethics rules, decentralized finance, and defining which firms are covered by the framework. Those items are less contentious than rewards and yield, he added, but still important, and negotiators are working through them step by step.

Staff and stakeholders have “made a lot of progress over the last probably 30 days or so,” he added, and “every single day it feels like the big momentum is finally on our side and we’re heading in the right direction.”

Two Senate panels share jurisdiction over market structure because the bill touches both securities and derivatives oversight. The Banking Committee, which oversees the Securities and Exchange Commission, postponed a markup in January. The Agriculture Committee, which oversees the Commodity Futures Trading Commission, advanced its version to the Senate floor the same month. Backers of the effort maintain that aligning the two approaches will be needed before a floor vote. A compromise on stablecoin yields would address one of the largest remaining issues.

The Senate’s work follows House passage in July of the CLARITY Act, which outlines how federal regulators would approach digital asset markets.

As we covered previously, the debate over the Clarity Act has centered on whether U.S. platforms can pay 4%–5% yield on stablecoin balances. Eric Trump accused big banks, including JPMorgan, Bank of America, and Wells Fargo, of lobbying to block such accounts to preserve deposits. Banks argue interest-bearing stablecoin accounts should be regulated like deposits. Separately, the OCC proposed rules to implement the 2025 GENIUS Act, setting oversight for payment stablecoin issuers and opening a 60-day comment period.