Senate Unveiled Crypto Market Structure Bill. Here’s what you need to know. 

U.S. lawmakers have formally introduced the Senate version of the long-awaited digital asset market structure bill, kicking off a high-stakes legislative battle between the crypto industry and the traditional banking sector – one that now centers squarely on whether stablecoins can pay yield.

The draft text, released late Monday ahead of a scheduled committee markup on Thursday, seeks to establish the first comprehensive regulatory framework for crypto markets in the United States. 

But buried in the bill is a controversial provision that would prohibit crypto platforms from paying interest or rewards on payment stablecoins, a clause that has already drawn sharp opposition from industry leaders.

What the bill does

The proposed legislation aims to bring long-sought clarity to crypto regulation by reallocating oversight responsibilities between federal agencies and defining how digital assets should be classified.

Most notably, the bill grants the Commodity Futures Trading Commission primary authority over spot crypto markets, a major industry win after years of enforcement actions led by the Securities and Exchange Commission. It also introduces a legal framework to determine when a token should be treated as a security versus a commodity, addressing one of the sector’s most persistent sources of regulatory uncertainty.

The stablecoin flashpoint

While the broader structure of the bill has been welcomed by many crypto firms, opposition has quickly crystallized around its treatment of stablecoins.

Banking trade groups, led by the American Bankers Association, have warned lawmakers that allowing non-bank companies to offer yield on stablecoins could trigger a large-scale shift of deposits away from traditional banks. In letters sent to Congress this week, the group argued that such products could siphon trillions of dollars from community banks and undermine financial stability.

Crypto companies see the issue very differently. Firms like Coinbase argue that banning stablecoin rewards would entrench a banking monopoly over yield-bearing products and strip stablecoins of one of their key competitive advantages.

That tension erupted publicly earlier this week when Coinbase signaled it could withdraw support for the bill altogether if lawmakers go beyond disclosure requirements and restrict stablecoin rewards, an ultimatum that now appears directly tied to the bill’s draft language.

Proof in the text

The conflict became unmistakable after Cynthia Lummis shared excerpts of the draft legislation on social media, confirming that a prohibition on stablecoin interest is already written into the text scheduled for Thursday’s markup.

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The relevant section states that a “digital asset service provider may not pay any form of interest or yield… solely in connection with the holding of a payment stablecoin.” The language aligns precisely with the restrictions Coinbase has warned it cannot accept.

Lummis, one of the Senate’s most prominent crypto advocates, urged colleagues not to “retreat from our progress,” signaling that the clause may represent a political compromise aimed at securing broader bipartisan support, particularly from lawmakers sympathetic to banking concerns.

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What happens next

The bill is scheduled for committee markup on Thursday, January 15, setting up a narrow window for negotiations over the stablecoin language. If crypto companies fail to soften or remove the interest ban, industry support for the broader market structure framework could fracture.

With the 2026 midterm elections approaching, the clock is already working against lawmakers. Failure to pass the bill this year could leave the crypto sector facing several more years of regulatory uncertainty, with courts (not Congress) continuing to shape the rules of the market.

For now, the release of the Senate text makes one thing clear: the fight over stablecoin yield is no longer theoretical. It is written into the law itself, and the outcome could determine whether comprehensive crypto regulation finally moves forward or stalls once again.