Key Moment in Cryptocurrency Legislation: Stablecoin Reward Dispute May Affect the Fate of the Market Structure Act

The U.S. Senate Banking Committee plans to review and vote on the Digital Asset Market Transparency Act (also known as the Market Structure Act or CLARITY Act) on January 15.

This bill aims to establish a comprehensive regulatory framework for the U.S. crypto market, classifying tokens as digital commodities rather than securities, and clarifying the regulatory responsibilities of the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

As the legislative process advances, disputes over stablecoin rewards have become a major stumbling block, and the confrontation between the banking industry and the crypto sector could influence the bill’s final outcome.

01 Background of the Bill

The U.S. Congress is accelerating its efforts to reform cryptocurrency policy, with the Market Structure Act becoming a focal point. The Senate Banking Committee and Agriculture Committee are preparing their respective drafts to jointly push forward this legislation.

The core of the bill is to clearly define the classification and regulatory responsibilities of digital assets, categorizing most tokens as digital commodities rather than securities, and creating a CFTC regulatory framework for digital commodity exchanges.

The bill also exempts crypto platforms from the requirement to register as national securities exchanges, allowing decentralized protocols to be only subject to anti-fraud rules, and aims to bring crypto activities back to the U.S., while simplifying the token listing process in the country.

According to the latest news, the Senate Banking Committee plans to review and vote on the bill on January 15. This timeline reflects strategic considerations by Republican leadership, who hope to complete the legislative work before a possible government shutdown.

02 Key Disputes

The issue of stablecoin rewards has become a major point of contention in the current legislative process. The recently passed GENIUS Act prohibits stablecoin issuers from directly paying yields to holders but allows crypto platforms and related entities to offer rewards to users.

Currently, platforms like Coinbase offer annual stablecoin rewards of about 2% to 4%, for example, Coinbase provides a 3.5% reward on USDC held in its Coinbase One balance.

The banking industry strongly opposes this, arguing that such incentives could lead to deposit outflows and threaten traditional banking operations. The American Bankers Association warned in a letter that if billions of dollars flow out of community bank loans, small businesses, farmers, students, and homebuyers will be affected.

The stablecoin market has now surpassed $275 billion in size and could reach trillions of dollars in the future, becoming “systemically important.” The banking sector fears that this growth could pose systemic risks.

Meanwhile, the crypto industry insists that reopening this debate would undermine the hard-won legislative compromise of the GENIUS Act, and is anti-competition and anti-free market. Coinbase Chief Policy Officer Faryar Shirzad stated that restricting stablecoin rewards could weaken the dollar’s dominance, especially considering China’s recent announcement of plans to start paying interest on its digital yuan.

03 Industry Response

The cryptocurrency industry has reacted strongly to this legislative process, with Coinbase indicating that if the bill imposes broader restrictions on stablecoin rewards, it may reconsider its support for the bill.

Stablecoin rewards are vital to Coinbase’s business. The company shares some interest income generated from USDC reserves with Circle, and USDC held in Coinbase provides a stable revenue stream.

According to Bloomberg data, Coinbase’s stablecoin revenue is expected to reach $1.3 billion by 2025. If the Market Structure Bill bans such incentives, fewer people will hold stablecoins on exchanges, potentially reducing Coinbase’s total stablecoin income.

Bernstein analysts warned in a client report that the confrontation between banks and crypto platforms over whether exchanges should offer yield-like rewards for stablecoin balances is intensifying. They see the stablecoin reward issue as a “red line,” and if no compromise is reached, the bill could be delayed or fail.

04 Potential Compromise

Faced with intense opposition from both sides, legislators are exploring possible middle-ground solutions. According to sources familiar with the discussions, one potential compromise is to allow only financial institutions with banking licenses or similar qualifications to offer stablecoin balance rewards.

Recently, five crypto companies received conditional approval from the U.S. Office of the Comptroller of the Currency to become national trust banks. This approval has also met strong opposition from banking lobbies, who argue that crypto companies could threaten the stability of the U.S. financial system.

If restrictions are implemented, some industry insiders believe it will only trigger a new game of cat and mouse, as crypto firms seek new ways to reward users. “In a world where you hold stablecoins within an app, that app will always find some way to give you a return,” said William Gaybrick, President of Technology and Business at payment giant Stripe.

Timing is critical. Bernstein analysts say the bill must be advanced by the second quarter of 2026 at the latest to avoid being affected by midterm election dynamics. The firm notes that the pro-crypto stance of the Trump administration gave the industry an advantage, but warns that if the reward dispute delays progress, this momentum could stall.

05 Market Impact

The progress of cryptocurrency legislation is closely linked to market performance. On the Gate exchange, the prices of mainstream cryptocurrencies reflect investors’ sensitivity to regulatory changes.

Several large token unlock events are scheduled this week, which could exert some selling pressure. These include the unlocking of approximately 92.65 million Arbitrum (ARB) tokens (worth about $19.2 million) on January 16, and about 50 million Official Trump (TRUMP) tokens (worth approximately $271 million) on January 18.

Bernstein analysts point out that the window of opportunity “is right here and now,” warning that unresolved disputes over stablecoin rewards could derail the legislative process.

Future Outlook

According to the schedule, the Senate Banking Committee will review the Digital Asset Market Transparency Act on January 15. The issue of stablecoin rewards has become a major point of contention, with the banking industry and the crypto sector clearly at odds on this matter.

Coinbase has hinted that it might withdraw support if the bill imposes restrictions on stablecoin rewards. However, analysts believe that crypto platforms will always find new ways to reward users, because “in a world where you hold stablecoins within an app, that app will always find some way to give you a return.”

Regardless of the outcome, this legislative debate unfolding in Washington has far exceeded policy-making, becoming a key battleground for the future of the trillion-dollar crypto market. As the voting day on January 15 approaches, all market participants are focused on the Senate Banking Committee’s meeting room.