According to a recent report from Roll Call, US Senator Cynthia Lummis, a digital asset advocate in Congress, is delaying the upcoming crypto market structure bill, as Senator is reluctant to review a provision of the recently passed GENIUS Act, which prohibits stablecoin issuers from offering interest payments.
Lawmakers Divided Over Crypto Interest Provisions
Senator Lummis is saying resist pressure from both Republicans and Democrats to change the interest language in the stablecoin bill. The banking industry argues that this provision creates a loophole that allows crypto exchanges to offer rewards, effectively allowing them to pay interest.
Lummis shared his perspective with reporters, stating: “I am of the opinion that we should leave the stablecoin bill alone. We have enough problems with the market structure.” In response, the crypto industry has launched a campaign to maintain the existing stablecoin rewards policy.
Those who oppose the interest in cryptocurrencies advocate that the issue of rewards be addressed in the new market structure legislation currently in development. This bill aims to establish rules for the operation and supervision of digital asset markets.
Sen. Bill Hagerty, R-Tennessee and sponsor of the stablecoin bill, acknowledged the complexity surrounding the issue of crypto interest, saying, “This is something that will require a lot more attention from my colleagues to address. It’s all up in the air.”
Banking and Crypto Lobby Clash
Last month, Senate banking Republicans updated a draft of the market structure bill, which Chairman Tim Scott hoped to advance by the end of September.
However, this deadline was not met due to several obstacles, including the conflict between the bank and crypto lobby regarding the interest of stablecoins and the bill’s focus on decentralized finance (DeFi).
A group of pro-cryptocurrency Senate Democrats recently proposed amendments to the bill that were rejected by Republicans and the cryptocurrency industry. These Democrats want the legislation to retain the intent of prohibiting interest or returns paid by stablecoin issuers, either directly or indirectly through affiliates.
Chairman Scott appears to be prioritizing Democrats’ concerns over Republicans regarding cryptocurrency exchange rewards. He has postponed a review of the bill to allow Democrats more time to address the legislative text, as his spokesman Jeff Naft noted.
Lawmakers are hesitant to predict when the committee might reach a consensus for a margin. “We’re trying to get a date for a profit margin,” Lummis said. Asked when that might be, he replied: “When we can agree on a date for a profit margin.”
Adding to the complexity of moving the bill forward is the impending partial government shutdown. Democrats have indicated that they prefer to finalize the base text of the bill before proceeding with a markup.
More than 320,000 letters sent to Senate offices
Cryptocurrency advocates are pushing for quick action on market structure legislation this year. Mason Lynaugh, community director at Stand with Crypto, stated:
The Senate must act quickly and deliberately to pass market structure legislation. Congress has the opportunity to position the United States as a global leader in the crypto industry, something that can only be achieved through effective market structure legislation.
The group reported sending more than 320,000 letters from more than 160,000 participants to Senate offices in recent weeks, urging lawmakers to reject a new anti-consumer initiative by the Senate. banking industry aimed at removing rewards from stablecoins.
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