The legislation is designed to “establish clear rules of the road for digital assets, all while protecting Main Street retail investors,” the committee’s Republicans said in a news release.
The proposal includes language that seems to bar crypto exchanges from offering rewards tied to stablecoin holdings. However the bill also lists some activities that would be exempt from that restriction, including “membership or participation in a loyalty, promotional, subscription or incentive program.”
As covered here last week, the question of whether crypto companies can offer yield-like rewards on stablecoin holdings has been a major, and unresolved, “regulatory flash point” following last year’s GENIUS Act.
“Traditional banks argue that such yield mechanisms siphon deposits from community banking markets and create unfair competition,” PYMNTS wrote.
“Cryptocurrency firms counter that yield incentives are essential to liquidity and user adoption, and that banning them outright would stifle innovation in DeFi and related markets. This standoff has emerged as one of the most potentially disruptive tradeoffs in the markup process.”
Meanwhile, the Banking Committee’s Democratic minority is calling on the the Securities and Exchange Commission (SEC) to detail how it will protect investors in the wake of President Donald Trump’s executive order clearing permitting pension funds and retirement accounts to hold cryptocurrency assets.
“For most Americans, their 401(k) represents a lifeline to retirement security rather than a playground for financial risk,” wrote Sen. Elizabeth Warren of Massachusetts, the committee’s ranking Democrat.
“Allowing crypto into American retirement accounts creates fertile ground for workers and families to lose big.”
Also Tuesday, PYMNTS explored the implications of the GENIUS Act in a conversation with Ryan Rugg, global head of digital assets for Citi Treasury and Trade Solutions.
She spoke with PYMNTS CEO Karen Webster for the debut episode of “From the Block,” a PYMNTS/Citi podcast, and said the GENIUS Act was significant not just on its own, but as part of a broader shift in how the federal government sees financial services innovations.
“Looking back on 2025, GENIUS was one key legislative piece,” Rugg said. “But if you think about it, there was also an executive order signed by President Trump. The bitcoin reserve is established. So clearly a foundational shift in the way that this administration is thinking about not just digital assets, but innovation overall.”
For regulated institutions, that position matters. Banks, Rugg added, aren’t operating in gray areas, but need defined rules to invest, integrate and scale.
“This is giving that pathway to our regulators to start laying those foundations for many institutions,” she said.
