Crypto Industry Urges Lawmakers to Act Following Breakthrough Agreement on Stablecoin Legislation
May 4, 2026 — by Emily Wilkins
After a significant breakthrough in negotiations, key players in the cryptocurrency industry are calling on Congress to swiftly advance the CLARITY Act, a major market structure bill aimed at clarifying the regulatory framework surrounding stablecoins. The push comes in the wake of compromise legislative language released by Sens. Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) that seeks to resolve an ongoing dispute between banks and crypto firms over stablecoin rewards.
Compromise Strikes Balance on Stablecoin Rewards
The newly proposed language from Senators Tillis and Alsobrooks focuses on preventing stablecoins from being classified as bank deposits while addressing concerns over yield-like payments. Under the proposal, cryptocurrency companies would be prohibited from offering interest-style rewards on stablecoin holdings — a practice banks argue could prompt depositors to move their funds out of traditional banks, potentially drying up loan capital.
However, the legislation does allow crypto firms to provide rewards on stablecoins, provided those rewards are linked to spending or using the digital currency rather than simply holding it. This distinction is viewed as a critical compromise designed to balance innovation and consumer protection.
Crypto Industry Enthusiastic, Senate Vote Anticipated
Coinbase, one of the largest cryptocurrency exchanges, has been a vocal supporter of the bill. Coinbase CEO Brian Armstrong took to X (formerly Twitter) urging the Senate Banking Committee to “mark up” the bill — a procedural step that would move the legislation toward a committee vote.
Similarly, the Blockchain Association’s CEO Summer Mersinger said the legislation represents “a step in the right direction” and called for the committee to advance without delay. The crypto sector regards this legislation as its top priority, with the Trump White House reportedly backing efforts to pass the bill.
Remaining Political and Industry Hurdles
The Senate Banking Committee has yet to schedule a vote on the measure. Committee Chair Sen. Tim Scott (R-S.C.) noted via X that members were “nearing consensus” and working toward a bipartisan markup in May. However, uncertainties remain, particularly regarding whether all Republican members are on board. This uncertainty contributed to the cancellation of a planned vote earlier in January.
Banking groups, including the American Bankers Association and the Bank Policy Institute, criticized the latest compromise, warning that ambiguous language around yield payments could still harm the banking sector. They cited research suggesting that yield-earning stablecoins might reduce consumer, small-business, and agricultural loans by 20% or more.
Political Dynamics: Bipartisanship Challenged
While several Democrats are engaged in negotiations and willing to advance the bill, key policy disagreements remain—especially on provisions related to ethics. Sen. Alsobrooks expressed cautious optimism but emphasized that “some more compromise and improvement” are needed before she can lend full support.
Republican Sen. Bernie Moreno (Ohio) predicted the bill would likely pass the committee on a partisan basis. Moreno voiced frustration over prolonged negotiations with Democrats, comparing the process to the classic “Charlie Brown and Lucy football” scenario, where last-minute demands repeatedly derail progress.
Looking Ahead
If the Banking Committee vote proceeds as hoped in May, the bill’s passage could mark a watershed moment for crypto regulation, providing clearer rules for stablecoins and alleviating uncertainty that has long clouded the industry. However, the path to full Senate approval—and eventual enactment—remains complex amid ongoing political negotiation and competing stakeholder interests.
For now, the cryptocurrency industry remains hopeful that the CLARITY Act will move forward promptly, unlocking broader opportunities for innovation and growth in the digital asset space.
Follow Emily Wilkins on X: @emrwilkins
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