In Washington, the safest vote is often no vote at all, and the most convenient timeline is “next session.” But when it comes to the future of banking, financial markets and financial services, inaction is unacceptable. The US needs crypto regulatory clarity to compete and succeed in the digitally networked financial system of the 21st century.
The Senate is at a crossroads today on market structure legislation – policy designed to bring order to digital asset innovation, an increasingly important component of global finance. Failing to codify the “rules of the road” doesn’t just stop crypto; it invites regulatory chaos that hurts both banks and consumers, undermines economic dynamism and forces innovation to drift offshore. Congress must choose whether America will lead the next generation of finance or watch from the sidelines.
The current impasse centers on a perceived conflict between banks and crypto platforms regarding interest payments and rewards on stablecoins – an issue already addressed by the GENIUS Act, which was signed into law by President Trump last year. The law allows crypto companies to offer rewards and incentives to customers for holding and using stablecoins provided by separate providers. Banks counter that such reward structures are similar to traditional bank savings and checking products and, if left unchecked, can shift customer balances away from insured deposits without the same prudential requirements.
Framed in this way, the disagreement carries more weight than it should. Dividends and rewards are matters of design within a payment framework, not matters of systemic safety or financial stability. Treating them as existential risks has delayed an otherwise straightforward solution, slowing progress on key market structure issues.
Looking past talking points, a workable compromise is already available. Congress may expressly enable federally regulated banks — including community banks — to offer returns on payment stablecoins. Banks gain a clear, federally sanctioned revenue and customer acquisition opportunity in the stablecoin market. They achieve a straightforward way to secure customers and funds, especially important for community banks seeking to remain competitive in a world of megabanks and scaled payment platforms. Crypto platforms, meanwhile, retain the incentive structures that their customers expect and that are available under current legislation. Congress is allowed to move market structure legislation forward and create a bill that can be passed. And most importantly, the American consumer benefits from increased competition and the opportunity to share in the dividend potential of their own money.
Framing crypto as an existential threat to community banking is a rhetorical tactic, not an economic reality. A recent empirical analysis finds no statistically meaningful relationship between stablecoin adoption and deposit outflows, suggesting that stablecoins function primarily as transaction instruments rather than savings substitutes. In fact, properly regulated stablecoins can provide local and local banks with an avenue to modernize their payment offerings and reach new customers.
The reward-yield issue is a design problem that can be solved without reversing progress that has already been made. A workable compromise exists that addresses the financial interests of banks, protects crypto-innovation, and respects the legislation set forth in the GENIUS Act. Progress on that basis keeps the broader market structure package intact and provides the legal clarity that the American economy deserves.
The Senate has the tools to resolve this impasse and follow the strong leadership shown by the White House. Failure to do so would be a choice, not an inevitability.
