Debate over the structure of the US digital asset market has intensified as lawmakers, regulators and industry leaders remain divided over stablecoin yield, federal oversight and the broader direction of crypto regulation. With Congress working on market structure legislation, stablecoins have emerged as a central fault line between banks, crypto firms and policymakers.
At the heart of the dispute is how stablecoin rewards should be treated under federal law. The GENIUS Act, passed last year, prohibits stablecoin issuers from offering yield directly to token holders. However, digital asset platforms such as Coinbase currently provide rewards to customers who hold stablecoins on their platforms. Traditional banks argue that allowing third party platforms to offer yield like incentives creates an uneven playing field and could trigger deposit outflows from the banking system.
White House officials have been attempting to broker a compromise to move broader market structure legislation forward. Proposed legislation in the Senate seeks to clarify regulatory roles between agencies and establish clearer rules for stablecoin issuance and digital asset trading platforms. Lawmakers have warned that legislative momentum could stall as the midterm election cycle approaches, compressing available floor time for debate.
Treasury Secretary Scott Bessent has publicly criticized what he described as industry resistance to regulation, suggesting that some firms prefer regulatory uncertainty over structured oversight. His comments followed statements from Coinbase leadership expressing opposition to certain legislative provisions. Coinbase has argued that restricting stablecoin rewards could undermine innovation and competitiveness in US digital markets.
Stablecoins, which now account for more than $300 billion in global supply, have become integral to crypto market liquidity and cross border payments. USDC, issued by Circle, remains a significant revenue driver for Coinbase, underscoring the economic stakes involved in the yield debate. Critics contend that offering rewards tied to stablecoin holdings resembles interest bearing deposits, while supporters argue that such incentives are essential for user adoption and global dollar competitiveness.
The regulatory debate extends beyond stablecoins. Congressional Democrats have questioned the Securities and Exchange Commission’s recent pullback from several crypto enforcement actions. Concerns about oversight consistency and potential conflicts of interest have added another layer of tension to ongoing negotiations over digital asset market rules.
Meanwhile, the Commodity Futures Trading Commission is preparing for an expanded role if market structure legislation passes. The agency has announced a new Innovation Advisory Committee composed largely of crypto industry executives, signaling closer engagement between regulators and digital asset firms.
As discussions continue behind closed doors, the outcome of the stablecoin yield dispute may shape the broader trajectory of US crypto policy. The balance struck between innovation, banking stability and federal oversight will likely determine whether the United States consolidates its role in digital asset markets or cedes ground to faster moving jurisdictions.
