A major cryptocurrency exchange announced Friday that federal lawmakers have successfully negotiated a compromise on contentious language within groundbreaking digital currency legislation, potentially paving the way for the bill’s advancement through the U.S. Senate.
The proposed legislation had hit a roadblock earlier this year when banking institutions raised objections to language that would permit stablecoin companies and cryptocurrency businesses to provide yield-generating products and customer rewards tied to digital coins. Banks argued these offerings could attract deposits away from traditional financial institutions, hampering their ability to finance loans.
Major cryptocurrency platforms like Coinbase argued that offering customer rewards remains essential for attracting new users, and that preventing such incentives would create unfair market conditions.
“In the end, the banks were able to get more restrictions on rewards, but we protected what matters – the ability for Americans to earn rewards, based on real usage of crypto platforms and networks,” stated Faryar Shirzad, Coinbase’s Chief Policy Officer, in a social media post.
According to Punchbowl News, which obtained details of the negotiated compromise crafted by Senators Thom Tillis and Angela Alsobrooks, the updated language establishes extensive limitations on rewards that function “in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.”
The revised legislation also instructs federal regulators to develop comprehensive stablecoin oversight rules, including establishing new disclosure requirements and defining acceptable reward programs, Punchbowl News reported. Reuters was unable to independently confirm these details.
Digital currency businesses have faced challenges operating without clear regulatory guidelines, which industry leaders claim has hindered growth opportunities. The proposed Clarity Act seeks to establish definitive rules that could encourage broader cryptocurrency acceptance.
President Donald Trump, who actively sought cryptocurrency industry support during his campaign and whose family has benefited financially from their own digital token venture, has made cryptocurrency regulatory reform a priority during his second term in office.
