New Bill Aims to Regulate U.S. Cryptocurrency Industry
A new bill poised to fully integrate the U.S. cryptocurrency sector into the regulated financial landscape has surfaced. The Senate Banking Committee released the document just after midnight Tuesday, ahead of a hearing aimed at pushing the initiative forward.
While the updated version wasn’t expected to surprise the industry, which had some prior access to the details, it does include contentious points regarding stablecoin yields. Additionally, it retains legal safeguards for decentralized finance (DeFi) developers, which, for now, has pleased certain segments of the cryptocurrency community. However, industry players are eager to examine the text more closely to ensure their concerns are addressed.
Chairman Tim Scott praised the bill, stating it represents the hard work of the committee to provide the necessary clarity and protection for American consumers, while also combating illegal financial operations and safeguarding the future of U.S. finance.
Yet, even if the committee approves it, there’s no certainty the bill will reach President Donald Trump. This week’s actions might enhance its chances, but several obstacles remain, including the need for an ethics clause still absent from the draft.
Ethics Concerns
Provisions aimed at preventing conflicts of interest, which would stop government officials from benefiting from the cryptocurrency scene, are outside the committee’s control and will have to be added later. This topic is sensitive, given Trump’s own extensive interests in crypto, and White House officials have made it clear they won’t entertain legislation targeting the president. Last week, Senator Kirsten Gillibrand mentioned at the Consensus Miami event that Democrats would not support the bill’s progress without this ethics provision.
At the same event, White House crypto advisor Patrick Witt stated that proposed rules need to be applicable to everyone, from the president down to interns, while rejecting specifics that target particular individuals or roles.
Democratic Senator Elizabeth Warren expressed concerns about ethics, emphasizing that these issues should not be overlooked. She argued that the draft could threaten the integrity of investors and the financial system, suggesting it could also aid Trump in leveraging his crypto ventures, as he and his family reportedly made over $1.4 billion from cryptocurrency trading during his time in office.
However, the ethics section remains unresolved as the Senate committee prepares for its Thursday vote on the bill.
Stablecoin Yield Restrictions
The newly released 309-page document addresses a key area of contention: acceptable yields for stablecoins. It proposes limits on interest payments connected to stablecoin balances, essentially equating them to yields from traditional interest-bearing bank deposits.
On Monday, Coinbase CEO Brian Armstrong commented on the negotiations, stating that while not everyone got their way, essential elements were achieved. He noted that Coinbase is collaborating with several major banks to facilitate cryptocurrency integration.
Armstrong expressed optimism about producing a mutually beneficial outcome with the banks involved.
However, some bankers see stablecoins as competitive threats and have ramped up efforts to influence the bill. Over the weekend, industry lobbyists urged lawmakers to impose stricter policies on stablecoin yield programs before the hearing.
Meanwhile, a recently released survey from Galaxy indicated that significant amounts of foreign capital could flow into the U.S. financial system, which would potentially outweigh any disruptions from domestic deposits. It suggested that much of stablecoin growth might occur offshore, further bolstering capital inflow into U.S. banking structures.
Provisions for DeFi
The bill upholds tenets of the Blockchain Regulatory Certainty for DeFi Act, designed to protect software developers who do not handle user funds from being classified as money transmitters. Advocates for DeFi have expressed encouragement regarding ongoing negotiations, highlighting that crucial protections for developers are present in this draft.
Additionally, it was reported that senators are coming together on bills related to law enforcement needs in the Transparency Act, particularly targeting crypto fraud linked to money laundering.
Witt noted that the administration aims to finalize the transparency bill by July 4, while Gillibrand anticipates completion by early August.
Challenges Ahead
Even if the committee approves the bill, Senate negotiators will face challenges merging it with a similar bill already passed by the Senate Agriculture Committee. They will also need to resolve the outstanding conflict-of-interest provisions before the full Senate vote, which requires broad bipartisan support, including from a significant number of Democrats. Historically, Senate votes on crypto-related efforts have seen substantial bipartisan backing.
Last year, the Senate passed the GENIUS Act of 2025 with a strong 68-30 vote, indicating some level of potential collaboration moving forward.
