The US Senate Banking Committee has postponed its discussion of a digital-asset bill. This delay occurred on Wednesday, shortly after Coinbase Global Inc. withdrew its support for the latest version of the legislation.
The primary point of contention involves proposed limitations on the ability of firms, including Coinbase, to offer yield or rewards on stablecoin holdings for customers. Stablecoins, which are digital tokens pegged to a stable asset like the US dollar, represent a significant part of the crypto ecosystem. Their use has expanded following US legislation passed in July.
Crypto executives have expressed concern that this legislative delay could result in the US regulatory framework for digital assets falling behind those in other markets. Dea Markova, director of policy at Fireblocks, stated that the delay is concerning as it could lead to the US being one of the few major digital asset hubs without a clear capital markets rulebook by 2026.
Following the news, shares of Coinbase declined by as much as 4%. Circle Internet Group Inc. and Gemini Space Station Inc. also saw their shares fall by approximately 5%.
The current proposal reportedly suggests a ban on stablecoin yield, although certain types of rewards might be permitted. However, the language defining what constitutes an allowed reward is not clear, according to Nana Murugesan, a former senior executive at Coinbase.
Crypto companies have historically utilized yield and rewards to encourage users to retain their digital assets. Examples include Ethena's dollar-pegged USDe, which integrates yield into its structure, and Coinbase's rewards for users holding Circle’s USDC stablecoin.
Ari Redford, global head of policy and government affairs at TRM Labs, explained that stablecoin rewards involve aspects of payments, savings-like behavior, and market incentives, which contributes to the issue becoming a central policy question during the bill's markup process.