Legislation that could fully insert the US crypto industry into the regulated financial system has emerged in its latest form, with the Senate Banking Committee unveiling the text of the Market Structure Act just after midnight Tuesday ahead of this week’s hearing to push the effort forward.
The latest version wasn’t expected to hold many surprises for the crypto industry, which has already had a chance to dig through it privately, but it still includes some controversial language about the stablecoin dividend, and it maintains legal protections for decentralized finance (DeFi) developers, keeping that corner of the crypto sector happy (for now). Industry insiders awaited the release late into the night and will still have to study the language to make sure their expectations were met.
“This bill reflects serious, good-faith work across the committee and delivers the safety, guarantees and accountability Americans deserve,” committee chairman Tim Scott said in a statement. “It puts consumers first, fights illicit finance, cracks down on criminals and foreign adversaries, and preserves the future of finance here in the United States.”
While approval in committee would mark a big, long-awaited step forward, the bill’s arrival on President Donald Trump’s desk is far from assured. Action this week would keep the possibility of passage alive, though a number of other hurdles remain — including inserting an ethics provision not yet present in this draft.
Ethics regulation
The conflict of interest section, which would theoretically restrict government officials from profiting from the crypto industry, is not under the banking panel’s jurisdiction, so the subject will have to enter legislation later. It has been a contentious issue because its genesis was situated in President Donald Trump’s own far-reaching crypto interests, but White House officials have repeatedly said they would not tolerate a bill targeting the president. Meanwhile, Democrats will not allow the bill to move without such a section, Sen. Kirsten Gillibrand said last week at Consensus Miami 2026.
On the same stage in Miami, White House crypto adviser Patrick Witt said the current negotiating position is to establish rules that apply “across the board, from the president all the way down to the brand new intern on Capitol Hill,” but rejects anything that singles out a particular office or official.
The committee’s ranking Democrat, Sen. Elizabeth Warren, made clear that the ethics item is a priority, releasing a critical commentary along with the panel’s release of the document.
“This bill puts investors, our national security and our entire financial system at risk — and it will fuel Donald Trump’s crypto corruption,” she said in a statement. “In just one year in office, the president and his family have raked in at least $1.4 billion in profits from crypto deals alone, and yet this bill contains astonishingly zero provisions to prevent it.”
However, the ethics piece remains on hold until the Senate committee can vote to approve the rest of the bill at its Thursday hearing.
Stablecoin dividend
The newly released 309-page text includes the part of the policy ground that lobbyists spent months fighting for — the question of what type of dividend would be acceptable for stablecoins. The document limits the payment of interest or returns “only in connection with the holding of … payment stablecoins” or on a stablecoin balance “in a manner that is economically or functionally equivalent to the payment of interest or returns on an interest-bearing bank deposit.”
Earlier on Monday, Coinbase CEO Brian Armstrong — whose company was at the center of the stablecoin reward negotiations — held a live event on social media X, saying, “Not everyone got everything they wanted, but they got the must-haves.” He said his company works with at least five of the largest global banks and is committed to banks successfully integrating crypto, he said.
“We want it to be win-win and work with the banks,” Armstrong said.
The result may be decided for committee traders, but the bankers who view stablecoins as a threat have launched a last-ditch attack to renew the result. Over the weekend, the industry lobby groups asked their members to make a final push among lawmakers to further limit stablecoin reward programs ahead of the hearing.
At the same time, research released last week from Galaxy claimed that trillions of dollars worth of foreign capital will flow into the US financial system, easily offsetting any domestic disruptions to deposits. The report “suggests that the majority of stablecoin growth will originate offshore, meaning that foreign capital will flow into US banking infrastructure at a rate that significantly exceeds any domestic deposit migration.”
DeFi
The legislation still includes a section matching the DeFi Blockchain Regulatory Certainty Act, which protects software developers who don’t control people’s money from being treated as money transmitters, plus a number of other demands from DeFi advocates.
“We are encouraged by the direction of recent negotiations and note that the most important provisions for developers and infrastructure providers – BRCA and protection under the Exchange Act – are in this bill,” the DeFi Education Fund said through a spokesperson, adding that the organizations will track changes this week and will flag those that oppose the sector.
Meanwhile on Monday, Punchbowl News reported an agreement between Senate lawmakers to address law enforcement needs in the Clarity Act, specifically an authorization for prosecutors to pursue crypto offenses on the money laundering front.
The White House’s Witt said last week that the administration is targeting a July 4 completion for the Clarity Act, although Sen. Gillibrand predicted its completion in the first week of August.
Work to do
Before then, Senate negotiators would still have some work to do on the bill after it moves past committee. Assuming the Clarity Act gets a nod from the panel, it still needs to be merged with a similar version previously approved by the Senate Agriculture Committee.
Then lawmakers also need to resolve the sticky conflict-of-interest provision before a final version is likely to be available for a vote by the full Senate, which would need 60 yes votes — necessarily including a significant number of Democrats. So far, progress through the Senate has depended on Republican Party votes, but other crypto endeavors have typically achieved strong bipartisan support when the final votes come.
Last year, the Guiding and Establishing National Innovation for US Stablecoins of 2025 (GENIUS) Act passed with a 68-30 vote in the Senate, easily clearing the minimum.
Read more: Banking groups escalate fight over stablecoin dividend ahead of Senate vote
UPDATE (12 May 2026, 04:31 UTC): Adds comment from Senator Tim Scott, Chairman of the Senate Banking Committee.
UPDATE (12 May 2026, 04:43 UTC): Adds language from proposed statutory text.
UPDATE (12 May 2026, 05:01 UTC): Adds remarks from Coinbase CEO Brian Armstrong.
UPDATE (12 May 2026, 05:05 UTC): Adding comment from Senator Elizabeth Warren.
