Crypto companies are proposing concessions on stablecoin rules in an effort to break a stalemate in the US Senate over the long-delayed crypto market structure bill.
The legislation has passed the House but stalled in the Senate amid disagreements over whether stablecoin issuers should be allowed to offer yield, a move banks argue could draw deposits away from traditional accounts.
According to sources cited by Bloomberg, crypto firms are now floating ideas such as giving community banks a larger role in the stablecoin ecosystem to ease opposition.
Proposals include requiring stablecoin issuers to hold reserves at community banks or enabling smaller banks to issue their own stablecoins through partnerships with crypto firms.
Senate Banking Committee chair Tim Scott said there would be “no deposit flight,” adding that allowing rewards is acceptable as long as crypto firms do not market themselves like banks.
The market structure bill has advanced out of the Senate Agriculture Committee but still requires alignment with a stricter version from the Senate Banking Committee.
To pass the full Senate and reach President Donald Trump, the bill will need support from at least seven Democrats, leaving negotiations over stablecoins central to its fate.