U.S. stablecoin regulation bill to set joint SEC–CFTC rules for ‘interest and rewards’ criteria

A stablecoin regulation bill under discussion in the U.S. Congress is said to include a provision calling for financial regulators to jointly establish detailed standards governing reward mechanisms.

According to Eleanor Terrett, host of Crypto in America, on the 24th (local time), the draft legislation would require the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Treasury Department to jointly define, within one year, the permissible scope of stablecoin rewards and standards to prevent regulatory arbitrage.

The key issue is the structure of stablecoin rewards. The draft is reportedly designed to restrict interest payments tied to holding balances, while allowing some transaction-based incentives.

Industry reaction, however, is mixed. One source said it is “a more restrictive approach” than a prior White House discussion draft, adding that “the economic equivalence standard is vague, which could lead to a stricter regulatory interpretation going forward.” In particular, there are concerns that provisions limiting rewards linked to balances or transaction volumes could make real-world product design difficult.

Another industry source, by contrast, was quoted as saying it is “a balanced outcome” that preserves transaction-based incentives while preventing deposit-like productization, and that it is “less stringent than the initial proposal.”

Overall, the bill has the character of a compromise, seeking to prevent stablecoins from performing functions similar to bank deposits while still acknowledging their potential uses within the crypto ecosystem to a certain extent.

Meanwhile, the banking sector is expected to further review the draft, leaving room for additional adjustments during the legislative process.