Members of the Senate Banking Committee are negotiating outstanding issues, such as how to treat stablecoin yield and addressing President Donald Trump’s conflicts of interest in several of his family members’ crypto ventures.
Senators are sifting through key issues that are proving to be vital in advancing a sweeping bill to regulate the cryptocurrency industry ahead of next week’s votes.
“It’s also sort of a do-or-die moment, like either something is going to come together in the next two to 14 days or it won’t,” a person familiar with the matter said in an interview with The Block. “I know that sounds like dramatic, but I just feel like that’s kind of where we’re at.”
Members of the Senate Banking Committee are negotiating outstanding issues, such as how to treat stablecoin yield and addressing President Donald Trump’s conflicts of interest in several of his family’s crypto ventures. The Senate Banking Committee has a draft of a bill that seeks to allocate jurisdiction between two main federal agencies — the Securities and Exchange Commission and the Commodity Futures Trading Commission — as well as create a new term for “ancillary assets” to clarify which cryptocurrencies are not securities.
Lawmakers were negotiating ahead of the new year, and this week, Senate Banking Committee Chair Tim Scott, R-S.C., said his panel would be holding a hearing on Jan. 15 to amend and ultimately vote on the bill.
However, if the version of the bill as it stands on Thursday is brought to the committee for a markup tomorrow, it would not get a single Democratic vote, the source familiar said.
“If they don’t get strong bipartisan support in committee, like a strong swath of Democrats voting for it, it will die on the [Senate] floor,” the source said. Getting that Democratic support for a bill is essential since 60 votes are needed to pass legislation on the Senate floor.
The stablecoin issue
Amid negotiations, Sen. Angela Alsobrooks, D-Md., proposed a compromise for fixing the treatment of stablecoin yield, according to Politico, which has been a major point of contention between banks and the crypto industry.
Banking associations have said that the stablecoin law passed over the summer has weak prohibitions against stablecoin issuers paying interest to holders, which could make those assets more attractive as stores of value. In a letter sent to the Senate this week, a group of community banks argued that a lack of clear limits could draw deposits away from local banks and disadvantage small businesses and households.
Many in the crypto industry pushed back this week, including Blockchain Association CEO Summer Mersinger, who said the vote on GENIUS proved that “thoughtful negotiations … took relevant risks into account and placed consumers above all else,” in a post on X.
Alsobrooks’ proposal says that a crypto exchange can offer yield on stablecoins if the customer takes certain actions, like selling their stablecoins. However, yield cannot be earned if the stablecoin is just sitting in the customer’s account.
Alsobrooks’ proposal is likely to have Democratic support, and maybe from Republicans as well. Sen. Katie Britt, R-Ala. told Politico her state is “built on community banks,” without talking specifically about the proposal.
However, the White House seemingly does not want to take up the stablecoin yield issue again.
“For the anti-rewards/yield crowd currently threatening to withhold their support for the CLARITY Act, I would remind you that tanking the bill over this issue preserves the status quo which you allege is intolerable,” said White House crypto advisor Patrick Witt in a post on X on Wednesday. “You will have achieved nothing.”
A spokesperson for the American Bankers Association responded to Alsobrooks’ proposal and said it was encouraging to see lawmakers discuss.
“We’re encouraged that Senators on both sides of the aisle recognize how critical this issue is for communities and the banks that support them,” said Sarah Grano in an email on Thursday.
The White House issue
A separate issue that has continually been raised is how to include an ethics provision in the crypto market structure bill to address Trump’s crypto conflicts of interest.
Bloomberg estimated last summer that the sitting president has earned roughly $620 million from his family’s cryptocurrency ventures. These include World Liberty Financial, a DeFi and stablecoin project that lists Trump and his three sons as co-founders. The family also holds a 20% stake in the mining firm American Bitcoin. Democrats have repeatedly expressed concerns about Trump’s crypto ventures, including memecoins tied to the president and First Lady.
Over the past few months, Sen. Cynthia Lummis, R-Wyo., said she has been negotiating with Sen. Ruben Gallego, D-Ariz., on adding in ethics language. But as of December, Lummis said that the White House was not yet sold.
Gallego told CNBC Correspondent Emily Wilkins on Wednesday that there is “backsliding on ethics” provisions.
“There’s some people within the industry that don’t understand that this is going to kill the bill,” Gallego said, according to Wilkins’ reporting.
And the midterms
The timing of these negotiations comes as midterm elections inch closer in November, affecting the bill’s political calculus.
The crypto industry has “two major carrots” — or sticks, depending on how you look at it, said Scott Johnsson, general partner at Van Buren Capital. One of those is major political action committee (PAC) funding and the other is advocacy group Stand with Crypto.
The crypto industry played a pivotal role in the 2024 election, spending millions of dollars, with influence going through PACs. The Stand with Crypto PAC launched in May 2024 with support from Coinbase to target U.S. elections and has an ongoing scorecard rating lawmakers on their crypto-friendliness. On Thursday, Stand with Crypto said it added 675,000 new members in 2025, growing by 35%.
Both will be “far more mature this time around,” Johnsson said.
“So in a world of small House majorities, this can have an impact at the margin,” Johnsson told The Block. “This all will impact the negotiating positioning going into next week.”
