Stablecoin Yield Clash Delays Crypto Legislation
Alex Thorn, head of research at Galaxy, revealed on social media that U.S. Senate Banking Committee Chair Tim Scott has postponed the scheduled hearings on crypto market structure legislation. A major sticking point in negotiations centers on stablecoin yield mechanisms, with banking lobbyists expressing concerns about potential deposit outflows and risks to the traditional banking system.
Proposed compromises aimed at curbing stablecoin yields have been met with resistance from the stablecoin industry, which views the terms as overly restrictive and potentially existential. Other unresolved issues include oversight of decentralized finance (DeFi), measures to combat illicit activity, and limitations on tokenized securities innovation.
Hearings Pushed to Late January
While no new hearing dates have been announced by the Senate Banking Committee, revised sessions are not expected to resume before the week of January 26–30 due to the Senate’s upcoming recess. Meanwhile, the Senate Agriculture Committee, which oversees CFTC-related matters, has also postponed its revisions hearing to January 27.