In Washington, the safest vote is usually not to vote at all, and the most convenient schedule is the “next session.” But when it comes to the future of banking, financial markets and financial services, inaction is unacceptable. The United States needs crypto regulatory clarity to compete and succeed in the digitally connected financial system of the 21st century.
The Senate today finds itself at a crossroads on market structure legislation: a policy designed to bring order to digital asset innovation, an increasingly important component of global finance. Failure to codify the “rules of the road” not only cripples cryptocurrencies; It invites regulatory chaos that harms both banks and consumers, undermines economic dynamism and forces innovation away from abroad. Congress must choose whether the United States leads the next financial generation or watches from the sidelines.
The current impasse centers on a perceived conflict between banks and crypto platforms regarding the interest yield and rewards of stablecoins, an issue already addressed in the GENIUS Act, signed into law by President Trump last year. The law allows crypto companies to offer rewards and incentives to customers for holding and using stablecoins available through third-party providers. Banks respond that such reward structures closely resemble traditional banking savings and checking products and, if left unchecked, could divert customer balances away from insured deposits without the same prudential requirements.
Framed this way, disagreement carries more weight than it should. Performance and rewards are issues of design within a payments framework, not issues of systemic security or financial stability. Treating them as existential risks has delayed an otherwise straightforward resolution, stalling progress on crucial market structure issues.
If one looks beyond the talking points, a workable compromise is already available. Congress can explicitly allow federally regulated banks, including community banks, to offer yield on payment stablecoins. Banks gain a clear federally approved revenue and customer acquisition opportunity in the stablecoin market. They gain an easy way to secure customers and funds, which is especially important for community banks looking to remain competitive in a world of megabanks and large-scale payment platforms. Meanwhile, crypto platforms retain the incentive structures their customers expect and are available under current law. Congress can advance market structure legislation and create a bill that can be passed. And, most importantly, the American consumer benefits from greater competition and the ability to share the potential return on their own money.
Framing cryptocurrencies as an existential threat to the community bank is a rhetorical tactic, not an economic reality. A recent empirical analysis finds no statistically significant relationship between stablecoin adoption and deposit outflows, suggesting that stablecoins function primarily as transactional instruments rather than savings substitutes. In fact, properly regulated stablecoins can provide local and community banks an avenue to modernize their payment offerings and reach new customers.
The issue of reward performance is a design issue that can be addressed without disrupting progress already made. There is a workable compromise that addresses the economic interests of banks, protects crypto innovation, and respects the established law of the GENIUS Act. Moving forward on that basis keeps the broader market structure package intact and provides the legal clarity the U.S. economy deserves.
The Senate has the tools to resolve this impasse and follow the strong leadership shown by the White House. Not doing so would be a choice, not an inevitability.
