The window for passing a comprehensive US crypto market structure bill is rapidly closing as lawmakers face mounting pressure to resolve disagreements over stablecoin rewards, according to analysts at Bernstein. In a note to clients, the firm said momentum behind the Digital Asset Market Clarity Act remains strong but fragile, with political timing now as important as policy substance. The legislation is intended to establish long awaited regulatory guardrails for the digital asset sector by clarifying oversight responsibilities and bringing crypto activity back onshore. While earlier debates focused on token classification and decentralized finance, Bernstein said those issues are largely settled. Instead, the fate of the bill now hinges on whether lawmakers can bridge a widening divide between banks and crypto platforms over the treatment of stablecoin based rewards, a dispute that threatens to derail progress if left unresolved.
At the center of the debate is whether exchanges and affiliated platforms should be allowed to offer yield like incentives on stablecoin balances. Banking groups argue that such rewards could siphon deposits from traditional accounts and pose risks if stablecoins scale into systemically important financial instruments. The stablecoin focused GENIUS Act, signed last year, barred issuers from paying yield directly but left room for platforms to share rewards with users, a compromise that crypto firms say should not be reopened. Bernstein noted that banks increasingly view this loophole as unacceptable as the stablecoin market grows beyond its current scale. Crypto advocates counter that restricting platform based rewards would be anti competitive and undermine the intent of earlier legislation. With both sides treating the issue as a red line, analysts warned that prolonged standoff could delay or even stall passage of the broader market structure framework.
The bill has already cleared the House and is now being finalized in the Senate, where the Banking and Agriculture Committees are responsible for different portions of the legislation. Markup sessions are expected soon, with the administration targeting final approval before the end of the first quarter. Political dynamics add urgency, as lawmakers aim to move the bill forward before the 2026 midterm election cycle begins to dominate congressional priorities. The debate intensified after Coinbase signaled it may withdraw support if broader limits on stablecoin rewards are imposed, underscoring how central the issue has become. Bernstein said the current administration’s pro crypto stance, under Donald Trump, gives the industry an advantage, but warned that momentum could fade quickly if compromises are not reached. In the firm’s view, the opportunity to enact a durable regulatory framework is here and now, and failure to act could push meaningful reform further into the future.
