The U.S. Senate’s progress on new crypto legislation has hit another speed bump. For American crypto traders, that means more uncertainty at a time when regulation could define which platforms, stablecoins, and yield programs survive. The reason for the latest delay is technical on paper but massive in impact: disputes over language in the country’s first stablecoin law.
The Senate Banking Committee has postponed marking up its next major crypto bill, a “market structure” package designed to define how exchanges, custodians, and decentralized finance platforms operate under federal law. Lawmakers on both sides say they want clarity and fairness, but the argument over whether exchanges can offer rewards or yield on stablecoins has put the process on hold.
The Stablecoin Law That Started It All
Earlier this year, Congress passed a long-debated stablecoin law aimed at giving U.S.-based issuers a clear framework. Among its most controversial provisions was a ban on stablecoin issuers offering “interest or yield” on their products. The intent was to separate payment-focused stablecoins from investment-like products that resemble savings accounts.
However, many crypto exchanges and fintech platforms offer “rewards” programs tied to stablecoins. These include bonuses for keeping funds on the platform, staking stablecoins, or spending them with crypto debit cards. Banks argue that these rewards are functionally the same as interest and undermine consumer protections. Crypto industry groups, including Stand With Crypto, say rewards are marketing incentives, not financial returns, and that banning them would stifle innovation.
Senator Mike Rounds, one of the sponsors of the stablecoin legislation, insists that lawmakers never intended for stablecoins or affiliated companies to pay any form of interest. Senator Cynthia Lummis, a long-time crypto advocate, has pushed back, warning that rewriting the law could delay the broader crypto-market bill even further.
The New “Market Structure” Bill
The next bill in line seeks to establish federal oversight for the broader crypto market. It would define the roles of the SEC and CFTC, set trading and custody rules, and bring more transparency to decentralized finance protocols. Supporters argue that this legislation is key to keeping U.S. crypto markets competitive globally.
But because the new bill references the stablecoin law, lawmakers are struggling to agree on how its definitions apply to exchange-based products. If the stablecoin law bans any interest or yield, can an exchange still offer a cash-back-style reward for using stablecoins? Can they share transaction fees with users who stake their coins? The lack of clarity has created friction between banking lobbyists, crypto industry groups, and lawmakers trying to thread the political needle.
The delay means the markup for the market structure bill has been pushed back, with no firm date rescheduled. That leaves both the industry and traders waiting for clarity on how their favorite platforms and stablecoins may be affected.
Big banks have lobbyists.
— Stand With Crypto🛡️ (@standwithcrypto) October 10, 2025
Crypto has the voice of the people.
Americans want Congress to protect access to stablecoin rewards — not hand more power to big banks.
The people have spoken. Let’s make sure lawmakers listen. https://t.co/OZSIMuT3MP@Coindesk @jesseahamilton pic.twitter.com/JQYgeYmKlD
Why U.S. Traders Should Pay Attention
For many U.S. traders, stablecoins are more than just a convenience. They serve as the backbone of liquidity, hedging, and capital management. Traders use USDC, USDT, and other dollar-backed tokens to move money quickly between exchanges, avoid volatility, and earn extra yield.
If regulators tighten restrictions on rewards or staking, platforms may stop offering these incentives altogether. That could lower overall returns for active traders who rely on passive yield to offset fees or market downtime. For those using decentralized exchanges or lending protocols, more regulation could also mean limited access, especially if DeFi platforms face new compliance requirements.
This uncertainty comes on top of existing concerns about where the SEC and CFTC draw jurisdictional lines. Traders are already navigating a patchwork of rules, and without clear federal legislation, that fragmentation continues.
The Key Issues at Play
- Rewards vs. Interest
The crypto industry argues that “rewards” are not the same as interest because they are not guaranteed, fixed-rate, or tied to deposit duration. Banks and conservative lawmakers disagree, saying rewards mimic the behavior of savings products that should be federally insured.
If regulators decide that rewards count as interest, platforms will likely need banking charters or special permissions to continue offering them. That could force exchanges like Coinbase or Gemini to restructure or suspend reward programs for U.S. customers.
- Oversight of DeFi and Exchanges
The Senate’s new bill will likely expand oversight for decentralized finance protocols, where lending, borrowing, and trading occur through smart contracts. This could lead to stricter Know Your Customer (KYC) requirements and registration mandates. For traders who use decentralized exchanges to find better prices or yield, that could mean fewer options or added friction. - Political and Timing Uncertainty
Partisan divides, budget debates, and the possibility of a partial government shutdown have slowed legislative work. As of late October, no new markup date has been announced. For the crypto market, that means an extended period of ambiguity. Traders will need to monitor how platforms react in the meantime, as some may preemptively adjust products to stay compliant.
Practical Implications for Traders
If the stablecoin law is interpreted broadly, exchanges may stop offering rewards tied to stablecoins. That could push U.S. traders toward offshore platforms or decentralized protocols still offering yield opportunities. However, that shift increases exposure to regulatory and security risks.
DeFi traders should also expect more discussions about transparency and risk disclosure. Some U.S. projects may geofence users or restrict access to high-yield strategies until they have more legal clarity.
If, on the other hand, Congress decides to maintain the current language, reward programs could continue in the short term. But the ambiguity will remain, meaning that traders may see fluctuations in yields or periodic product suspensions as companies try to interpret the rules conservatively.
What to Watch Next
- Senate Banking Committee Schedule: Keep an eye on when the committee reschedules its markup of the market structure bill.
- Amendments or Clarifications: Watch for any new language clarifying the difference between “interest” and “rewards.”
- Exchange Policy Updates: Check announcements from U.S.-based exchanges like Coinbase, Kraken, or Gemini about changes to reward programs.
- Stablecoin Issuer Disclosures: USDC or PayPal USD issuers may update their terms if new interpretations emerge.
- Industry Lobbying Efforts: Advocacy groups such as Stand With Crypto and the Blockchain Association are expected to push for clearer definitions to protect innovation and consumer choice.
The Bottom Line
The Senate’s slowdown is more than political theater. It is a sign of how complex crypto regulation has become. For U.S. traders, the uncertainty over what counts as “interest” or “reward” directly affects profitability, platform choice, and strategy.
Until Congress finalizes a consistent framework, traders should plan for flexibility. That means diversifying across platforms, monitoring compliance updates, and preparing for yield fluctuations. The line between innovation and regulation is still being drawn, and traders who stay informed will be best positioned to adapt when the rules finally settle.
