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Coinbase says Senate compromise could revive crypto bill
Coinbase, a US-listed crypto exchange, said on May 1 that US senators had reached a compromise on a disputed stablecoin provision, a step that could restart a stalled crypto bill in the Senate.
The bill had stalled after banks opposed allowing stablecoin issuers and crypto firms to offer yield-like rewards that could pull deposits from traditional lenders.
The new text would ban rewards that work like interest on bank deposits and require regulators to draft stablecoin disclosure rules and a list of permitted reward activities.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
Banks came out ahead in the deal
- The agreement bans “passive” yield earned simply by holding stablecoins. That model competes most directly with bank deposits 1.
- The banking lobby pushed on that issue. It argued that unregulated yields could draw as much as US$6.6 trillion from deposits held at traditional financial institutions 1.
Crypto firms now need to rethink product design
- The ban on models built around “idle-balance returns” forces product changes, especially for decentralized finance (DeFi) protocols, which are blockchain-based financial services that operate without traditional intermediaries like banks 1.
- Crypto companies now need new “activity-based” loyalty programs. The draft also bans arrangements “economically equivalent to interest,” which leaves little room for product design 2.
Recent Coinbase developments
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