Senate Banking Committee to Vote on Landmark Crypto Stablecoin Bill on May 14

The Senate Banking Committee has scheduled a vote for May 14 on a major stablecoin regulation bill, advancing a piece of legislation that has divided the banking and cryptocurrency industries for months.

Committee Chairman Tim Scott, R-S.C., has been pushing to bring the bill to a vote after a prior attempt to advance it in January was called off at the last hour following objections from both sectors.

The committee vote is expected to fall largely along party lines. Scott told Fox Business last week that he wanted "13 of 13 Republicans on board," referring to full GOP support on the committee. Whether any Democrats will join them remains uncertain, as several provisions — including those that would limit how politicians profit from digital assets — remain unresolved.

The bill's forward momentum represents a setback for the banking industry. Banks have argued that the bill's language restricting when stablecoins can earn interest still too closely resembles yield-bearing products such as savings accounts, and could draw deposits away from traditional financial institutions.

A compromise proposal from Sens. Thom Tillis, R-N.C., and Angela Alsobrooks, D-Md., attempted to address the dispute by outlining conditions under which crypto companies could offer rewards to stablecoin holders without directly competing with bank deposit yields. The proposal brought crypto firms including Coinbase back to the table.

Still, groups representing both commercial and community banks said the compromise language "falls short" of adequately protecting banking deposits. Tillis, in a post on X, acknowledged the banking industry's dissatisfaction, writing that "we respectfully agree to disagree."

A stablecoin is a digital currency designed to hold a consistent value by being pegged to a reserve currency, typically the U.S. dollar. Historically, the ability to earn rewards has been a central incentive for users to hold stablecoins.

Several senators and industry experts have indicated the bill can still be modified to attract Democratic support in the window between a committee vote and any floor vote. However, the timeline is tight, and it remains unclear whether the House would seek to introduce its own revisions if the Senate version passes.

The May 14 vote marks the first formal legislative test for what would be the first major federal regulatory framework governing stablecoins, underscoring the growing urgency in Washington to establish rules for the digital asset industry.

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