7 Crypto Bill Debates: Stablecoin Yield as Red Line & Future of Crypto Regulation

Jakarta, Pintu News – The proposed crypto bill in the United States, designed to provide a regulatory framework for the rapidly growing cryptocurrency market, is facing significant pressure due to a dispute over yields on stablecoins.

A growing argument suggests that if legislators choose to restrict or ban the proceeds from stablecoins, some industry figures would prefer the bill to fail, exposing a shift in priorities in the legal debate and how it could affect the future of digital assets.

1. Stablecoin Yield and Crypto Bill Controversy

Crucial discussions in the crypto bill focused on whether yields earned on stablecoins should be allowed or limited by the new law. Recent reports suggest that legislators are increasingly open to requests from the traditional financial sector (TradFi) to remove or limit stablecoin yield provisions in the bill. This has sparked concerns among industry participants that such restrictions could be detrimental to market incentives and overall DeFi growth.

Galaxy CEO Mike Novogratz criticized this trend as a “sad state”, stating that the legislative focus appears to favor bank margins over consumer protection and market innovation. The comments reflect the sharp disagreement between crypto stakeholders and legal authorities over the course of regulation.

2. Crypto Industry Reaction to Proposed Ban

Nic Carter, partner at crypto venture capital firm Castle Island Ventures, asserts that if legislators insist on stablecoin yield restrictions, the sector may be better off without the bill. This opinion reflects concerns that the removal of yield incentives could narrow the innovation space and hinder wider adoption of blockchain technology.

Some other figures in the crypto community view the restrictions as weakening the appeal of stablecoins to retail and institutional investors, especially in the context of global competition with more digital asset-friendly jurisdictions. Critics argue that it could drive capital out of the US market.

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3. Senator’s Role and Bill Markup Process

The crypto bill is being scheduled for markup by two key committees on January 15th: SenateBanking Committee andSenate Agriculture Committee. The Banking Committee will focus discussions on the SEC’s authority and issues such as stablecoin yields and DeFi provisions, while the Agriculture Committee will review the role of the CFTC.

To pass this stage and advance to a vote in the full Senate, the bill requires strong bipartisan support, including at least 60 votes in the Banking Committee. Failure in the markup could delay or derail legislative efforts for 2026, due to congested congressional schedules and other priorities.

4. Impact on Cryptocurrency Market

A potential ban or restriction on stablecoins could affect the dynamics of the cryptocurrency market at large. Stablecoins have played an important role in providing liquidity and capital inflow/outflow in the crypto ecosystem, including for assets like Bitcoin , Ethereum , and other altcoins. Concerns have been raised that yield restrictions could reduce the attractiveness of such assets to investors.

In addition, this rule change may encourage investors to seek opportunities outside the US, accelerating the shift of institutional capital to markets that are more friendly to DeFi policies and digital assets.

5. Innovation vs Consumer Protection Debate

Proponents of stablecoin yield restrictions often highlight consumer risk and the potential downsides of an unregulated market. From a traditional perspective, the high yields of stablecoins can be seen as a speculative incentive that is less transparent than conventional money market instruments.

However, opponents of such restrictions argue that market incentives are an integral part of digital financial innovation. They claim that weakening this feature could hinder technology adoption and development in a highly competitive global market.

6. Optimistic Support Position

Some parties in the legislative meeting remain optimistic that the crypto bill can pass this bottleneck with a balanced compromise. For example, lawyer from Consensys, Bill Hughes, stated that despite the pitfalls, the negotiation process has brought the bill closer than ever before to reaching a consensus.

This kind of view suggests that there is still hope for regulation that supports consumer protection without destroying the market incentives that the crypto community deems important.

7. Future Legislation Challenges

If the bill fails in the Banking Committee on January 15, it will not immediately halt the development of cryptocurrencies in the US, but it will likely exacerbate market sentiment and delay further legislative efforts. The failure could also signal that a more inclusive legislative approach to digital markets is needed to find a balance between innovation and protection.

This debate is a clear example of the ongoing tension between legal authorities and new technological developments such as DeFi, stablecoins, and broader digital financial services.

Also Read: Raydium Price Prediction 2026: Significant Upside Potential in the Solana Ecosystem

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Reference:

• Benjamin Njiri/AMBCrypto. ‘Let crypto bills die’ – Crypto VC cites stablecoin yields as red line. Accessed January 12, 2026.