Crypto Advocates Renew Stablecoin Rewards Push as Market Structure Bill Nears Key Senate Vote
TL;DR
Crypto advocates are intensifying efforts to preserve stablecoin rewards as the Senate Banking Committee prepares to vote on a market structure bill. Industry leaders argue restrictions could harm U.S. competitiveness and dollar dominance, while banks warn of risks to local lending.
Key Takeaways
- •The Senate Banking Committee is nearing a key vote on crypto market structure legislation, with stablecoin rewards being a major point of contention.
- •Crypto industry leaders argue banning stablecoin rewards would create uncertainty, hurt U.S. competitiveness against China's Digital Yuan, and potentially drive innovation offshore.
- •Banking groups warn that stablecoin rewards could incentivize customers to move savings out of banks, jeopardizing local lending in communities across America.
- •Lawmakers have reportedly assured the crypto industry that new rules will create 'parity' between banking and crypto sectors without favoring one side over the other.
- •The Digital Chamber is organizing a major lobbying effort with 55 crypto industry representatives meeting with over 20 Senate offices to push for favorable legislation.
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The debate surrounding stablecoin rewards is growing louder as the Senate Banking Committee approaches a key markup vote on a crypto market structure bill next Thursday.
After hundreds of community bank leaders urged U.S. Senate members to protect local lending from perceived stablecoin risks, several high-profile members of the crypto industry pushed back, including Coinbase Chief Policy Officer Faryar Shirzad.
“Congress already settled this in GENIUS—reopening it now only creates uncertainty and risks the future of the U.S. Dollar as commerce moves on-chain,” he said on X, referring to provisions in landmark stablecoin legislation passed this summer.
It’s no mystery why big banks want rewards banned. U.S. banks earn $176B/year on the ~$3T they park at the Fed—and another $187B/year from card swipe fees (~$1,440 per household). That’s $360B+ annually from payments and deposits alone (and massive unused lending capacity that…
— Faryar Shirzad 🛡️ (@faryarshirzad) January 7, 2026
Under those rules, companies like Coinbase are able to make yield-like payments to customers who hold stablecoins on their platform, but organizations like the American Bankers Association have described the workaround as detrimental to local communities.
“Allowing inducements like interest or rewards on stablecoins could incentivize customers to move savings out of banks, jeopardizing the lending that fuels growth in towns across America,” the organization’s council of community bankers wrote in a letter to lawmakers on Monday.
Cody Carbone, CEO of The Digital Chamber, a leading trade association for the crypto industry, told Decrypt that stablecoin rewards are squarely in focus among lawmakers, representing one of several key factors that need to be resolved to make way for the bill’s passage.
On Tuesday, more than a dozen pro-crypto senators attended a meeting in Banking Committee Chair Tim Scott’s office, but it’s unclear what progress lawmakers made during the three-hour meeting, per Crypto in America. Topics reportedly raised include ethics rules, bipartisan representation at agencies regulating crypto, and a number of DeFi-specific rules.
Carbone said that he’s received assurances from lawmakers that any new rules in the market structure bill will create “parity” between the banking and crypto industry, meaning they won’t favor one side over the other.
“We’re at a point now where it has reached such a hot-button issue that it will be addressed in any text that goes forward,” he told Decrypt. “It’s too early for me to say if it's make-or-break, but what we're anxiously awaiting to see is what the resolution is going to be.”
On Thursday, The Digital Chamber plans to have around 55 representatives from various crypto firms fly to Washington, D.C., to meet with more than 20 Senate offices. The group will be diverse, Carbone said, including reps from exchanges, token issuers, and DeFi protocols.
The goal is to show lawmakers that the crypto industry is deeply motivated to move legislation forward, Carbone said. Last year, pro-crypto Republicans wanted to pass the legislation by July, but they missed the deadline, as well as ones set for October and December’s end.
Coinbase’s Shirzad framed stablecoin rewards as a geopolitical matter, noting that China has unveiled plans to pay interest to users of its Digital Yuan. He argued that lawmakers would be ceding ground to China if they moved forward with restrictions on stablecoin rewards.
Ji Kim, CEO of the Crypto Council for Innovation, echoed Shirzad’s sentiment on X, warning that consumer adoption of stablecoins has the potential to move offshore. He also cautioned that provisions in the bill could also affect the dominance of the U.S. dollar.
“Stablecoin rewards facilitate customer acquisition, allow for customer loyalty, build merchant acceptance, and ensure continued U.S. leadership over stablecoin innovation,” he added.
Carbone said that the industry will have a better sense of what the market structure bill’s text will look like on Thursday. Broadly, the bill aims to establish jurisdictional boundaries between the SEC and CFTC, while setting registration rules for exchanges and intermediaries.