The push to regulate crypto in the United States has entered another complicated stage, with lawmakers now debating more than 100 proposed changes to a major crypto market structure bill before it moves forward in the Senate.
According to a leaked amendment list obtained by Politico, members of the Senate Banking Committee are preparing for a heated discussion over how digital assets should be regulated, who should be allowed to participate in the industry, and how much freedom crypto companies should really have under the law.
The bill itself is designed to create a clearer framework for crypto regulation in the US. Lawmakers want to define which agencies oversee different parts of the industry, especially stablecoins and trading platforms. But while there is broad agreement that regulation is needed, there is still a major divide over what those rules should look like.
Stablecoin Rules Become the Biggest Fight in the Bill
Much of the disagreement now centers around stablecoins, which are cryptocurrencies tied to traditional currencies like the US dollar.
Banks have been pushing lawmakers to stop crypto firms from offering yield or interest-like rewards on stablecoins. Traditional financial institutions argue that these products could start functioning too much like bank accounts without following the same banking rules.
A newer version of the bill reportedly tries to limit that by banning crypto platforms from offering stablecoin rewards that are “functionally equivalent” to interest paid on bank deposits.
That wording, however, has not settled the debate.
Democratic Senators Jack Reed and Tina Smith are now proposing stricter language that would widen the restriction even further. Their amendment reportedly replaces the phrase “functionally equivalent” with “substantially similar,” which could make it harder for crypto companies to structure reward programs around stablecoins.
The argument over yield has become one of the biggest reasons the legislation has slowed down over recent months. Banking groups believe the current wording still leaves room for crypto firms to compete with banks in ways regulators cannot fully control. Crypto companies, meanwhile, argue that the rules are becoming too restrictive and could limit innovation.
Still, some lawmakers involved in negotiations insist that talks are moving in the right direction. “We have worked too hard on this bill to give up now,” Senator Angela Alsobrooks, who sits on the Senate Banking Committee, said while discussing the stablecoin yield compromise alongside Senator Thom Tillis. “My hope is to get to a bipartisan markup on Thursday with a compromise on ethics.”
Crypto Ethics Rules Spark Another Round of Tension
A key part of the debate now centers on ethics and the role public officials should play in the crypto industry.
One amendment proposed by Senator Chris Van Hollen aims to prevent senior government figures, including the president, vice president, members of Congress, and their families, from holding, promoting, or maintaining financial connections to crypto businesses or projects.
The proposal arrives as lawmakers continue to face pressure over possible conflicts of interest connected to digital assets. Crypto has become a growing political issue in Washington, and some senators want stronger guardrails before the market expands further under federal regulation.
However, not all the proposed changes are focused on restrictions. Some amendments are aimed at protecting developers working in crypto.
Senator Catherine Cortez Masto is reportedly introducing a proposal that would create a legal safe harbor for software developers who build crypto tools but do not directly handle customer funds.
That discussion has become increasingly important after several enforcement actions in recent years raised concerns that developers could face criminal liability simply for creating blockchain software.
The coming Senate markup will likely determine whether lawmakers are finally close to a workable compromise or whether the US crypto regulation debate is heading into another long period of delays and political disagreement.
