Senate Bipartisan Deal on Stablecoin Regulation Takes Shape

A significant development in the regulation of cryptocurrencies has taken place in the Senate, as Sens. Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) have finalized a compromise on stablecoin yield and rewards.

The agreement introduces requirements for crypto companies to offer rewards tied to stablecoins, with a broad prohibition on rewards that are economically or functionally equivalent to interest-bearing bank deposits. This move aims to address concerns surrounding the potential misuse of stablecoins for yield and reward purposes.

The Tillis-Alsobrooks compromise also directs regulators to propose a new series of stablecoin regulations, including a disclosure regime and a list of permissible reward activities. These developments are set to be included in an upcoming crypto markup in May.