Crypto Firms Offer Fixes as Stablecoin Dispute Halts Bill

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Crypto Firms Pitch New Fixes as Stablecoin Debate Freezes US Bill

Written by Aaron S.,

Editor-In-Chief

Last Updated: February 05, 2026

Key Takeaways

Debate over stablecoin yields has stalled US crypto legislation, with banks warning it could hurt traditional savings;
Crypto firms propose giving community banks bigger roles and using them for stablecoin reserves to restart Senate talks;
Lawmakers say progress is possible if crypto issuers stop marketing themselves as banks while yield rules are discussed.

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Crypto Firms Pitch New Fixes as Stablecoin Debate Freezes US Bill

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Efforts to pass US crypto market rules have hit a pause, mainly due to debate over stablecoins and whether issuers should offer interest-like rewards.

According to a Bloomberg report, several crypto firms are proposing changes to resume progress on the stalled bill.

The House has already approved its version of the legislation, but talks in the Senate have slowed. Traditional banks have voiced concerns that yield-bearing stablecoins could draw customers away from savings accounts.

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Some proposals include allowing community banks to play a bigger part in the stablecoin system. Others recommend that stablecoin issuers keep their reserve funds in community banks or partner with them to issue their own digital coins.

Despite these efforts, a White House meeting on February 2 between representatives from the crypto industry and banking industry ended without a clear outcome.

Senate Banking Committee Chair Tim Scott told Fox News that offering rewards on crypto holdings could be acceptable, as long as these companies do not promote themselves as banks.

He emphasized that there is no risk of customers moving deposits away from traditional institutions. He said, "We’re going to sit down with consumer banks, hopefully next week again, and have this conversation".

Scott concluded, "The good news is that both sides remain at the table <...> we’re going to overcome those hurdles and make sure that America is the crypto capital of the world".

The UK’s House of Lords held a session to hear opinions on stablecoins as part of a new inquiry into how they should be managed under national rules. What did they say? Read the full story.