US senators move to set clear rules for crypto and stablecoins

• Draft bill clarifies token classification, grants CFTC spot market authority, and blocks stablecoin interest while allowing activity-based rewards.
• SEC and CFTC must issue joint disclosure rules on stablecoin rewards; Senate Banking debates Thursday, and Senate Agriculture meets later this month.
• House passed a version in July; industry spending in 2024 and the 2026 cycle shape prospects, with some skepticism about passage this year.

US senators are moving closer to reshaping how the United States regulates cryptocurrency, with a new draft bill that could define the future of digital assets, trading platforms, and stablecoins. This push in the Senate follows years of pressure from the crypto sector for clear rules, and growing concern in the banking sector about the impact of digital money on deposits and financial stability. The latest legislation, released late on Monday, sets out to clarify which agencies oversee which parts of the market, how tokens are classified, and what rewards companies can offer on stablecoins, while lawmakers also balance political pressure ahead of the next election cycle.

Regulatory framework pushed by US senators for crypto and stablecoins

The proposal from US senators establishes a regulatory framework that seeks to end the long-running debate over whether most crypto tokens should be treated as securities, commodities, or something else entirely. Under the draft, regulators would receive clearer mandates, with the US Commodity Futures Trading Commission gaining expanded authority over spot crypto markets, a role the industry has championed for years. The Securities and Exchange Commission would still oversee tokens that meet traditional securities tests, but the bill aims to reduce uncertainty that has driven many firms to hold back products or move operations overseas. The legislation responds to mounting complaints from crypto exchanges, wallet providers, and token issuers who argue that unclear rules threaten the sector’s future in the United States. Industry executives claim that without a defined framework, they must navigate overlapping enforcement actions and guidance that can change from one administration to the next. The draft bill aims to give them a path to compliance by spelling out when a token falls under commodities law, when it becomes a security, and when it remains outside both categories. This approach could shape how new digital assets launch, how platforms list them, and how investors receive disclosures about the risks they take. US senators also target stablecoins, the dollar-pegged tokens that now sit at the core of trading and payments activity in crypto markets. A law passed last year started building a federal regime for stablecoins, but banks complained that a loophole allowed intermediaries to pay interest on these tokens, which they said could drain traditional deposits and create new systemic risks. The new draft moves to adjust that framework instead of scrapping it, reflecting months of negotiations between lawmakers, banking lobbyists, and digital asset firms that view stablecoins as a foundation for faster payments and new financial products. The bill’s text suggests that Congress aims to let stablecoins grow while placing limits on how they compete with conventional savings and deposit accounts.

Banks and crypto firms clash over stablecoin rewards

The fight over stablecoin rewards sits at the center of the latest proposal, and US senators now try to define a middle ground between bank concerns and crypto business models. Bank lobbyists have pushed hard for changes, warning that allowing intermediaries to offer interest on stablecoins could encourage customers to pull funds out of insured accounts. They argue that if millions of users shifted cash into interest-bearing tokens issued or managed by non-banks, the traditional banking system might face liquidity strains and more vulnerability in periods of stress. Their campaign in Washington has focused on closing what they call a loophole, and they have framed the issue as a matter of financial stability rather than simple competition. Crypto companies and their trade groups reject that argument, saying that an outright ban on interest would tilt the field toward banks and shut down innovation in digital finance. The Blockchain Association, led by CEO Summer Mersinger, has criticized what it describes as relentless pressure by large banks to rewrite the bill in a way that shields their position. The group argues that eliminating stablecoin rewards would effectively prevent new products from gaining traction, because users expect some form of return or incentive when they hold or use digital tokens. US senators drafting the measure appear to have absorbed some of these complaints, and the current text reflects a compromise that narrows which rewards are allowed without banning them entirely. Under the Monday bill, crypto firms would not be able to pay customers interest simply for holding a stablecoin over time, removing one of the features banks most strongly opposed. However, the proposal lets platforms and issuers offer rewards or incentives tied to specific actions, such as sending payments, using a token in a loyalty program, or participating in defined promotional campaigns. That distinction tries to preserve stablecoins as a tool for transactions, rather than turning them into direct rivals to insured savings accounts. The legislation also requires the SEC and CFTC to issue joint rules on disclosures, so consumers receive clear information about any rewards they earn and the risks associated with those programs.

US senators steer committee battles and political momentum around crypto bill

The path to law now runs through key Senate committees, where US senators will argue over amendments on money laundering, decentralized finance, and consumer protections. The Senate Banking Committee has scheduled a debate and amendment session for Thursday, marking one of the most concrete steps yet in the chamber on broad crypto market structure. Members will examine how far the bill should go in tightening anti-money-laundering requirements, especially for platforms that allow users to trade without traditional intermediaries. For some lawmakers, the rise of decentralized finance raises questions about how to enforce sanctions, identify beneficial owners, and prevent illicit flows while still allowing open-source innovation. At the same time, the Senate Agriculture Committee is preparing its own version of the bill, given its jurisdiction over the CFTC and commodity markets. Later this month, that committee will meet to refine its text, which could differ on details such as how to define a digital commodity or which tokens receive futures-style oversight. The existence of two versions means that US senators must eventually reconcile differences, either through negotiations between committee chairs or during broader floor consideration. Industry groups like The Digital Chamber, whose CEO Cody Carbone called the latest step encouraging, plan to stay involved as text evolves. They want assurances that the final bill preserves room for new products and does not impose overlapping rules that increase compliance costs without reducing risk. The broader political backdrop also shapes how quickly US senators move. The House of Representatives passed its own market structure bill in July, after heavy spending by crypto industry groups in the 2024 elections to support candidates seen as more open to digital assets. That earlier momentum stalled in the Senate last year, as disagreements over decentralized finance rules and anti-money-laundering provisions slowed talks. Now, as Congress turns attention toward the 2026 midterm elections, some lobbyists doubt that both chambers can finish work and send a bill to the White House in time. If Democrats manage to retake the House in that cycle, the balance of power and appetite for crypto legislation could shift again, leaving the sector with another period of uncertainty.

US senators, Trump and the struggle over long-term crypto policy

The political dimension stretches beyond Congress, as US senators weigh how their positions align with the next presidential term and the wider party strategies. Donald Trump has signaled strong support for the digital asset industry, calling himself a “crypto president” and backing ventures involving his own family. Those moves, plus aggressive fundraising from crypto-aligned political action committees, have brought the issue closer to the center of national debates. Lawmakers who support the current bill argue that a predictable framework could encourage responsible growth and keep jobs and capital inside the United States, instead of pushing trading and innovation to jurisdictions with looser rules. Opponents or skeptics inside the Senate warn that rushing ahead could lock in regulatory gaps before authorities fully understand the evolving risks of complex digital systems. They point to episodes of market turmoil and failures of large crypto firms as evidence that investor protection and market integrity require stricter oversight, not lighter treatment. The tug of war between these viewpoints shapes nearly every line in the draft text, from the definition of a digital commodity to thresholds that trigger registration duties. If Congress fails to act this year, the industry will continue relying on agency guidance and enforcement actions that can swing with each administration, something executives describe as a major obstacle to long-term planning and infrastructure investment. For now, the latest bill signals that US senators recognize the need for clearer rules on digital assets, and that both banking and crypto sectors have enough clout to influence outcomes. The measure seeks to answer long-standing questions: when a token counts as a security, which trades fall under CFTC oversight, and how stablecoins can reward users without upending the traditional deposit base. Whether the legislation reaches the president’s desk remains uncertain, but its details already frame the next phase of the US debate over how to regulate a sector that continues to grow, lobby, and challenge existing financial structures.

Conclusion

US senators have placed a detailed crypto and stablecoin framework at the center of their legislative agenda, building on months of negotiations between banks, digital asset firms, and regulators. The bill released on Monday channels concerns over financial stability, competition, and consumer protection into specific rules on token classification, CFTC authority, and the limits of stablecoin rewards. Committees in Banking and Agriculture now carry the task of refining the text, while broader political forces, including the legacy of the 2024 elections and the run-up to 2026, shape the odds of final passage. If Congress completes this work, the United States may gain a clearer and more stable environment for digital assets. If it does not, companies and investors will remain dependent on shifting regulatory guidance, with the future of the sector still open to changes in both markets and politics.

Disclaimer

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