US lawmakers have released a draft version of a major crypto market structure bill that would limit how stablecoins can generate yield while significantly expanding the scope of digital asset activities allowed for banks. The proposal, published by the US Senate Banking Committee, adopts the name Digital Asset Market Clarity Act and is expected to move to markup later this month. Under the draft, banks and financial holding companies would be permitted to engage in a wide range of crypto related activities, including custody, trading, lending, and potentially proprietary trading, provided they comply with existing safety and soundness rules. The framework reflects growing pressure from traditional financial institutions seeking clearer legal authority to operate in digital asset markets without relying on regulatory exemptions or informal guidance.
One of the most closely watched elements of the bill focuses on stablecoin interest and reward programs. The draft prohibits the payment of interest or rewards that are solely linked to holding stablecoins, addressing long standing concerns among regulators that yield bearing stablecoins could resemble unregulated bank deposits. However, the language leaves room for rewards tied to activity rather than passive holding, such as transactions, account usage, or participation in broader programs. Analysts note that this distinction could allow structures that closely resemble interest through minimal activity requirements. The wording has raised questions about how effectively the rule would limit yield generation and whether it could be easily structured around while still meeting the letter of the law.
Beyond stablecoins, the bill signals a broader shift toward integrating banks more deeply into crypto markets. By explicitly allowing lending, trading, and other balance sheet activities, the proposal would place regulated institutions on firmer footing to compete with crypto native firms. Supporters argue this approach improves oversight and financial stability, while critics warn it could entrench loopholes and uneven competition. As the legislation advances, stablecoin rules are expected to remain a central point of debate, particularly as lawmakers balance consumer protection with market innovation.
