Sen. Thom Tillis has moved to the center of the Senate debate over stablecoin yield, with his position now carrying unusual weight in negotiations over the Clarity Act. The dispute has held up the bill for nearly two months, as banks and crypto companies keep pressing opposite arguments on whether stablecoin issuers should be allowed to offer yield or rewards.
Tillis recently met with crypto industry representatives and White House officials, and reviewed legislative drafts produced during talks between banks and digital asset firms. People familiar with the matter said he remains cautious about several industry proposals. He is also considering a joint meeting with Coinbase and banking trade groups so both sides can make their case directly before he decides where he stands.
Banks argue rewards could draw money out of deposits
Traditional financial institutions have warned that generous stablecoin rewards could pull funds away from bank deposits and alter liquidity across the financial system. That concern has become one of the main sticking points in the Clarity Act talks. The Senate Banking Committee had already delayed a markup on the bill, and Coinbase later withdrew its support after Tillis and Sen. Angela Alsobrooks proposed amendments that would limit stablecoin rewards.
Crypto lobby groups are still trying to keep negotiations alive. Cody Carbone, CEO of the Digital Chamber, said discussions with Tillis remain constructive and that he believes the talks are moving in the right direction. Even so, negotiators have acknowledged that the yield issue has delayed progress for weeks and pushed other policy disputes into the background.
Other unresolved issues remain on the table
The stablecoin debate is not the only problem left in the bill. Open items also include oversight of DeFi and conflict-of-interest rules for government officials who hold crypto assets. Trade groups are watching the schedule closely. One industry executive said lawmakers still hope to line up a Senate Banking Committee markup in late March.
Separate CBDC fight centers on a 2030 sunset clause
Congress is also handling a separate digital currency dispute. A provision in the 21st Century ROAD to Housing Act would temporarily ban a Federal Reserve central bank digital currency, but the language includes a sunset clause that expires in 2030. Critics say that would leave open the possibility of reviving a retail CBDC after the ban runs out.
Sen. Ted Cruz has filed an amendment to remove the sunset clause and plans to seek a vote when the Senate takes up the housing bill. In the House, Rep. Michael Cloud led 32 House Republicans in a letter urging congressional leaders to adopt a permanent CBDC ban. The signatories also included Rep. Anna Paulina Luna. In that letter, the lawmakers warned they could oppose the housing legislation if it does not contain a permanent prohibition.