Stand With Crypto is urging the Senate Banking Committee to provide stronger protection for Decentralized Finance (DeFi) and stablecoin rewards programs. The organization’s state chapter presidents sent a letter to members of the Senate Banking Committee as the panel reviews how to regulate DeFi platforms and stablecoin rewards. The chapter presidents said, “We remain hopeful that this Congress will still pass clear and fair rules of the road for crypto , without incorporating provisions that undermine the development and adoption of cutting-edge financial technology.”
Dispute Over Stablecoin Yield Programs
At the center of the debate is the GENIUS Act, which prohibits stablecoin issuers from paying direct interest to users but allows third parties. The third-party platforms, such as those operated by Coinbase, can offer rewards to users. Traditional banking groups argue such incentives could draw deposits away from banks, while crypto firms say restrictions would halt innovation.
Another issue up for debate is the treatment of DeFi platforms under the proposed Blockchain Regulatory Certainty Act. The measure aims to protect developers who do not control user funds from being classified as financial intermediaries. However, some lawmakers have proposed stricter definitions that critics say could overregulate the sector.
Despite recent White House efforts to negotiate a compromise, no agreement has been reached. Advocates warn that weakening DeFi protections could push innovation overseas, signaling a key moment for U.S. crypto policy.
