Tim Scott Expects Proposal for Stalled Crypto Bill This Week

US Senator Tim Scott says he expects a possible compromise this week on a stablecoin yield payments provision that has stalled a crypto market structure bill in the Senate.

“I believe that this week we will have the first proposal in my hands to take a look at,” Scott, the chair of the Senate Banking Committee that is working to advance the bill, said on Tuesday at a crypto lobby event in Washington, D.C.

“If that actually happens before the end of this week, and I think that it will […] I think we’re going to be in much better shape,” he added.

The Senate has been trying to advance its version of a crypto market structure bill that outlines how regulators will approach crypto after the House passed similar legislation in July, called the CLARITY Act.

The Senate’s bill has stalled amid negotiations between banking and crypto lobbyists over a provision in the legislation that would ban third parties from offering stablecoin yield payments.

Banking groups assert that stablecoin yields paid by platforms such as crypto exchanges are a loophole in the GENIUS Act, which banned yield payments from stablecoin issuers, and could threaten the stability of the banking system through deposit flight.

As stablecoin yield payments are a popular way for exchanges to entice customers, crypto lobbyists have fought the claims and accused the banks of anti-competitive behavior.

Other issues in bill also making progress

Scott said the issue of stablecoin yield was only the “largest publicly celebrated challenge” of the bill, but other issues under negotiation included provisions around ethics, decentralized finance and “who is carved in and who is carved out” of the rules.

“Those issues seem to pale in comparison to the rewards issue, but they’re still very important outstanding issues that we are nibbling away at as we work on the more popular issue of rewards and yield,” he added.

Related: CLARITY Act risks handing crypto to centralized players: Gnosis exec

“We have made a lot of progress over the last probably 30 days or so,” Scott said. “We’re working on a lot of issues, but every single day it feels like the big momentum is finally on our side and we’re heading in the right direction.”

Procedural rules mean two committees are overseeing crypto market structure legislation in the Senate, as the bill concerns the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Senate Banking, which oversees the SEC, indefinitely postponed a markup of the crypto bill in January, while the Senate Agriculture Committee, which oversees the CFTC, sent its markup of the bill to the Senate floor that same month.

Magazine: Quitting Trump’s top crypto job wasn’t easy: Bo Hines