Senate Banking Committee to Vote on Crypto Market Structure Bill May 14

m. The vote marks the first major step forward for the legislation since January, when the committee canceled a planned markup after objections from both the banking and crypto industries. A compromise proposal released last week by two senators addresses how crypto companies can offer rewards to stablecoin users.

The language would prohibit yield on static stablecoin reserve holdings while allowing rewards for stablecoins involved in other activities. Crypto companies including Coinbase have since voiced support for the revised text. Banking industry groups said the language still falls short of protecting deposits.

A letter from multiple trade associations including the American Bankers Association stated that additional work is needed to balance innovation with consumer safeguards. The groups plan to provide specific edits to the provision. The committee chairman told Fox Business last week that he aimed to secure support from all Republican members on the panel.

It remains unclear whether any Democrats will back the bill, with differences persisting over provisions limiting how politicians can profit from digital assets. One senator has called for an ethics provision barring senior government officials from such profits while regulating the industry.

dollar. Historically, interest in the form of rewards has served as a key incentive for users to hold them. Banks have argued that allowing such rewards could make stablecoins too similar to savings accounts and threaten traditional deposits. The updated compromise seeks to draw a clearer line between prohibited yield on reserve holdings and permitted rewards tied to active use.

Despite the changes, banking groups maintained their concerns in a letter issued Friday. The scheduling of the markup indicates lawmakers intend to proceed with the current version regardless. Atkins reiterated the call in recent statements, linking it to broader shifts toward blockchain-based infrastructure and AI-driven finance.

The agency is also considering new rulemaking for onchain trading systems and blockchain settlement. The bill must clear additional hurdles after the committee vote. The Senate will need to merge the Banking Committee's version with one from the Senate Agriculture Committee before a full chamber vote.

Time is limited for resolving remaining differences, and it is uncertain whether the House will accept the Senate's changes without its own revisions. The legislation had been in limbo since Coinbase pulled its support in January over stablecoin yield and other issues.

The recent compromise appears to have brought the company back on board. Polling cited by one senator's office found that 73% of registered U.S. voters believe senior government officials should not have business ties to the crypto industry while regulating it.

Several senators and industry experts have suggested the bill could be further amended to gain broader Democratic support between the committee stage and a potential Senate floor vote. However, the window for such negotiations is narrowing. The markup hearing will proceed with the current text even as banking groups continue to express reservations.