Bank Resistance Puts 2026 Passage Of Crypto Market Structure Bill In Doubt, Reuters

Banks have objected to provisions that would permit stablecoin issuers and other crypto firms to offer yield-bearing products and customer rewards. Lenders argue that such incentives could siphon deposits away from traditional banks, making it more difficult for them to fund loans and support credit creation.

Crypto companies, for their part, maintain that the ability to offer rewards is essential to attract users and remain competitive. They argue that prohibiting such incentives would amount to an anti-competitive restriction designed to protect incumbents.

Four individuals familiar with the private negotiations said the proposal was intended to strike a balance between innovation and deposit stability. Crypto firms have reportedly accepted that compromise. However, banks have signaled they still cannot support it. 

A banking industry source added that some lenders believe the permitted activities under the compromise would still meaningfully weaken deposit bases.

Several senators are said to back the banking sector’s position, and industry representatives believe they may be able to secure more favorable terms with that political support.

Time is another significant obstacle. Senate floor time is limited, particularly as lawmakers prepare to leave Washington in the summer to begin campaigning for the midterm elections. 

Adrian Wall, managing director of the Digital Sovereignty Alliance, a pro-crypto advocacy group, said the window for passage is rapidly closing. If the bill is not approved and sent to the President by July, he argued, it will become increasingly difficult to revive momentum before the elections. 

The political calculus could become even more complicated after November. If Democrats gain seats in Congress, prospects for passing crypto-friendly legislation could diminish further. 

Geopolitical developments are adding further uncertainty. According to Brian Gardner, chief Washington strategist at Stifel, the war in Iran is making it even more challenging for Congress to devote attention to crypto regulation this year.

In a note published Tuesday, Gardner wrote that the legislative calendar is increasingly working against the bill. “The calendar is becoming the enemy of this bill,” he said.

Featured image from OpenArt, chart from TradingView.com