Overview
- New draft language prohibits digital asset service providers from paying interest or yield solely for holding payment stablecoins while allowing transaction- and activity-based incentives such as payments, transfers, loyalty programs, liquidity provision, and staking.
- The bill directs the SEC and CFTC to issue joint, plain‑English disclosure rules within 360 days, including clear identification of who pays rewards and statements that payment stablecoins are neither securities nor bank deposits and lack FDIC insurance.
- Coinbase has warned it may withdraw support if the legislation restricts platform rewards beyond disclosure requirements, a stance tied to material USDC-related income, including roughly 3.5% rewards for some users and an estimated $1.3 billion in 2025 revenue.
- Committee timing diverged as the Senate Agriculture Committee delayed its CFTC-side markup to later in January while Senate Banking kept a Jan. 15 markup, with three Democratic senators seeking a public hearing given the short review window.
- Banking groups backed the passive-yield ban after Treasury-linked concerns about deposit flight, while crypto trade groups argue broader limits would curb competition and risk pushing users to offshore platforms.