Legislation that could fully insert the US crypto industry into the regulated financial system has emerged in its latest form: the Senate Banking Committee released the text of the market structure bill shortly after midnight on Tuesday, ahead of this week’s hearing that will boost the effort.
The latest version wasn’t expected to offer many surprises for the crypto industry that has already had a chance to discuss it privately, but it includes still-controversial language about the performance of stablecoins and maintains legal protections for decentralized finance (DeFi) developers, keeping that corner of the crypto sector happy (until now). Industry insiders waited late into the night for the launch and will still have to study the language to ensure their expectations were met.
“This bill reflects serious, good-faith work across the committee and provides the certainty, safeguards and accountability that Americans deserve,” committee Chairman Tim Scott said in a statement. “It puts consumers first, combats illicit finance, cracks down on criminals and foreign adversaries, and keeps the future of finance here in the United States.”
While committee approval would mark an important and long-blocked step forward, the bill’s arrival on President Donald Trump’s desk is far from certain. This week’s action would keep the possibility of approval alive, although other obstacles remain, including the insertion of an ethics provision not yet present in this draft.
Ethics provision
The section on conflicts of interest that would theoretically limit government officials from profiting from the cryptocurrency industry is not under the jurisdiction of the banking panel, so the issue must be incorporated into the legislation later. It has been a contentious issue, because its genesis was based on President Donald Trump’s own extensive crypto interests, but White House officials have repeatedly said they would not tolerate a bill that targets the president. Meanwhile, Democrats will not allow the bill to move forward without such a section, Sen. Kirsten Gillibrand said last week at Consensus Miami 2026.
On the same stage in Miami, White House crypto advisor Patrick Witt said the current negotiating stance is to set rules that apply “across the board, from the president to the new intern on Capitol Hill,” but reject anything that singles out a particular position or official.
The committee’s ranking Democrat, Senator Elizabeth Warren, made clear that the ethics point is a priority and published a critical comment alongside the panel’s presentation of the document.
“This bill puts investors, our national security, and our entire financial system at risk, and will accelerate Donald Trump’s crypto corruption,” he said in a statement. “In just one year in office, the president and his family have made at least $1.4 billion in profits from crypto deals alone, and yet this bill shockingly includes no provision to prevent it.”
However, that ethics piece remains on hold until the Senate committee can vote to approve the rest of the bill at its hearing on Thursday.
Stablecoin performance
The newly released 309-page text includes the political terrain that lobbyists spent months fighting over: the question of what kind of yield would be acceptable for stablecoins. The document restricts the payment of interest or yield “solely in connection with the holding of… payment stablecoins” or on a stablecoin balance “in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.”
Earlier on Monday, Coinbase CEO Brian Armstrong, whose company was at the center of the stablecoin rewards trade, held a live event on social media site His company is working with at least five of the largest banks in the world and is committed to banks successfully integrating cryptocurrencies, he said.
“We want to make it a win-win and work with the banks,” Armstrong said.
The outcome may have been settled by committee negotiators, but bankers who see stablecoins as a threat have mounted a final assault to revamp the outcome. Over the weekend, industry lobbyists called on their members to make a last-ditch push among lawmakers to further limit stablecoin bounty programs ahead of the hearing.
At the same time, research published last week by Galaxy argued that trillions of dollars in foreign capital will flow into the US financial system, easily offsetting any domestic deposit shocks. The report “suggests that most of the growth in stablecoins will originate overseas, meaning that foreign capital will flow into the US banking infrastructure at a rate that materially exceeds any migration of domestic deposits.”
defi
The legislation still includes a section that coincides with the DeFi Blockchain Regulatory Certainty Act, which protects software developers who don’t control people’s money from being treated as money transmitters, in addition to a host of other demands from DeFi advocates.
“We are encouraged by the direction of recent negotiations and note that the most important provisions for infrastructure developers and providers – the BRCA and protections under the Exchange Act – are in this bill,” the DeFi Education Fund said through a spokesperson, adding that the organizations will track amendments this week and flag those that oppose the sector.
Meanwhile, on Monday, Punchbowl News reported on a deal between Senate lawmakers to address law enforcement needs in the Clarity Act, specifically a grant for prosecutors to pursue crypto crimes on the money laundering front.
The White House’s Witt said last week that the administration aims to finish the Clarity Act by July 4, although Sen. Gillibrand predicted it would be finished by the first week of August.
work to do
Before that, Senate negotiators would still have work to do on the bill once it advances beyond committee. Assuming the Clarity Act gets the panel’s go-ahead, it would still have to be merged with a similar version previously approved by the Senate Agriculture Committee.
Lawmakers will then also have to resolve the complicated conflict of interest provision before a final version is available to be voted on by the entire Senate, where 60 votes in favor will be needed, necessarily including a significant number of Democrats. So far, progress in the Senate has depended on Republican party-line voting, but other crypto efforts have typically garnered significant bipartisan support when final votes come down.
Last year, the Guiding and Establishing National Innovation for US Stablecoins Act of 2025 (GENIUS) succeeded with a 68-30 vote in the Senate, easily surpassing the minimum.
Read more: Banking groups step up fight over stablecoin performance ahead of Senate vote
UPDATE (May 12, 2026, 04:31 UTC): Adds a comment from Senator Tim Scott, chairman of the Senate Banking Committee.
UPDATE (May 12, 2026, 04:43 UTC): Adds language from the text of the proposed bill.
UPDATE (May 12, 2026, 05:01 UTC): Adds comments from Coinbase CEO Brian Armstrong.
UPDATE (May 12, 2026, 05:05 UTC): Adds a comment from Senator Elizabeth Warren.
