A draft crypto market infrastructure bill released by the U.S. Senate Banking Committee is reshaping how American banks may engage with stablecoins and broader digital asset activity. The proposal, which aligns its structure with the House backed Digital Asset Market Clarity Act, sets out a framework that allows banks and financial holding companies to participate in a wide range of crypto related services as long as they comply with safety and soundness standards. Under the draft, banks could potentially trade, lend, custody, and provide infrastructure services linked to digital assets, significantly expanding their operational scope. The approach signals a shift away from narrow permissions toward a more principle based regime, where regulatory compliance rather than activity type determines eligibility. This change reflects growing recognition among lawmakers that digital assets are becoming embedded in capital markets and payments, requiring clearer rules that integrate banks rather than exclude them from crypto activity.
One of the most closely watched sections of the bill addresses stablecoin interest and reward mechanisms, an area of sustained debate between regulators and financial institutions. The draft explicitly restricts the payment of interest or rewards that are solely tied to holding stablecoins, a provision designed to prevent stablecoins from functioning as deposit like instruments. At the same time, the language leaves room for banks to offer rewards linked to activity rather than passive balances. This includes transaction based incentives, account usage benefits, or participation driven programs that are not framed as interest payments. Industry observers note that the distinction creates flexibility for banks to design stablecoin products that remain economically attractive while technically complying with the restriction. However, the wording also raises questions about how easily the rules could be structured in ways that resemble yield, particularly if minimal activity thresholds unlock ongoing rewards.
The draft legislation is widely viewed as an attempt to balance financial stability concerns with competitive pressures from non bank crypto firms and offshore platforms. By allowing banks to engage in digital asset markets while limiting explicit yield on stablecoin balances, lawmakers appear to be drawing a line between payments oriented stablecoins and investment products. This approach could accelerate bank participation in stablecoin settlement, treasury management, and transaction services without triggering deposit substitution risks. At the same time, the bill may invite further regulatory scrutiny over how rewards are structured and monitored in practice. As the markup session approaches, the proposed framework is likely to influence how banks plan stablecoin strategies in 2026 and beyond, particularly as institutions seek compliant ways to integrate tokenized money into existing financial infrastructure.
