Tillis to Release Stablecoin Yield Ban Draft This Week

Senator Thom Tillis will release a draft agreement this week that attempts to settle the dispute over stablecoin yields between banking and crypto lobbies.

The proposal would ban crypto exchanges from offering stablecoin yield payments, a position the banking sector has pushed since the House passed the CLARITY Act in July 2024. Banks argue these yields create deposit flight risk to the traditional banking system. Tillis told Politico on Monday that people are apprehensive because they haven't seen the full text yet, but the draft has been directionally instructed by what the group considers legitimate issues around deposit flight when talking about yield.

The draft was reviewed earlier this month by banking and crypto representatives, but both sides have raised concerns. Tillis said the group has made progress on anti-evasion provisions but is still working on enforcement language. The stablecoin yield dispute has kept crypto market structure legislation in limbo for months, with the White House already mediating three meetings between the warring groups.

Tillis said he's open to making changes to the proposal and wants to get down to a negotiating mark. If disagreements persist from either banking or crypto groups, he offered to broker another White House-mediated meeting to call balls and strikes on the final pieces and see if they can get a mark done.

The banking lobby wants a complete ban on third-party stablecoin yield offerings, while crypto platforms view these products as a major business line.