Crypto Firms Buoyed by Trump Get Rocked as US Bill Delayed

(Bloomberg) — The unbridled optimism that permeated the crypto industry during Donald Trump’s first year back in power is giving way to angst, after a much-awaited digital-asset bill was delayed in the Senate amid frenzied debate over the treatment of stablecoins.

The Senate Banking Committee on Wednesday delayed its discussion of the bill, hours after Coinbase Global Inc. pulled its support for the latest version. Among elements of the bill Coinbase and other firms are lashing out against are limits on their ability to offer yield or rewards on customers’ stablecoin holdings.

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Stablecoins are a key pillar of the cryptoasset universe, and usage is booming after the US passed legislation governing them in July. After their success helping get Trump elected and the stablecoin bill passed, crypto executives now fear the impasse over tokens pegged to the dollar could prevent the US regulatory framework from catching up with other markets.

“This delay is concerning as it creates a probability for the US to be one of the only major digital assets hubs without a clear capital markets rulebook in 2026,” said Dea Markova, director of policy at Fireblocks, a crypto custody services provider.

Shares of Coinbase fell as much as 4%, while Circle Internet Group Inc. and Gemini Space Station Inc. each slipped around 5%.

The latest proposal suggests paying stablecoin yield will be banned, although some types of rewards may be allowed. But the language around exactly what kind of rewards would be permitted isn’t straightforward, according to Nana Murugesan, a former senior executive at Coinbase.

Crypto companies have long enticed users with yield and rewards as a way to motivate them to hold their digital assets for longer, rather than converting them back into fiat currencies. Some tokens, like Ethena’s dollar-pegged USDe, offers yield as a built-in part of their structure.

Coinbase offers rewards to users who hold Circle’s USDC stablecoin in their accounts, akin to the returns traditional savings accounts feature.

“Stablecoin rewards sit at the intersection of payments, savings-like behavior, and market incentives,” said Ari Redbord, global head of policy and government affairs at TRM Labs. That explains why “a narrow technical issue has become a central policy question as the bill moves through markup.”

Limits on such rewards could put crypto firms regulated in the US at a disadvantage, some executives said.

“Whenever things are unclear, it is then again subject to interpretation,” said Murugesan. “If there are any restrictions, the theory is that’s only going to disadvantage US companies as opposed to offshore companies who are going to continue to give rewards out.”

The banking industry has warned that yield-bearing stablecoins could siphon deposits away from traditional lenders. Legislation approved last year allows banks to issue their own stablecoins, and several crypto companies have since applied for a bank charter. That law, called the Genius Act, bans stablecoin issuers from offering interest.

The swift reaction from Coinbase — which is among donors for the ballroom Trump is building in the White House — also hints at how the industry is flexing its newfound clout in Washington. Brian Armstrong, Coinbase’s chief executive and a Trump supporter, said in an X post that he was pulling support for the latest text of the bill due to “too many issues.”

That drew a retort from Senator Cynthia Lummis, a committee member, who said on X that such responses from crypto outfits “proves they just are not ready.”

The bill’s delay doesn’t mean the legislation is dead in the water, said Michael Bucella, managing partner of Neoclassic Capital.

“I have a strong belief we will get a bill passed within this administration’s term,” he said. “The form of the bill is ultimately what is a greater unknown.”

–With assistance from Emily Nicolle.

(A previous version of this story corrected the spelling of Ari Redbord’s name in ninth paragraph.)

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