Crypto advocacy group Stand With Crypto has urged US lawmakers to preserve DeFi protections and allow stablecoin rewards, as legislative negotiations enter a critical phase. The push reflects mounting industry concern that pending rules could restrict core business models across exchanges and decentralized platforms.
State chapter presidents sent a joint letter this week to the Senate Banking Committee, which is preparing to revisit broader crypto legislation. The group called for maintaining provisions that permit third-party platforms to offer rewards on stablecoins and for safeguarding decentralized finance (DeFi) developers under existing proposals.
Will Stablecoin Rewards Survive Senate Scrutiny?
The debate centers on how to interpret earlier legislation. The GENIUS Act, passed in July, restricts stablecoin issuers from paying interest but does not explicitly ban rewards offered by intermediaries such as exchanges. Banks argue that yield-bearing stablecoins could divert deposits from traditional institutions, while crypto firms contend such limits would constrain product innovation.
DeFi classification remains another fault line. The Blockchain Regulatory Certainty Act (BRCA), included in a House-passed market structure bill, exempts developers who do not control user funds from money transmitter requirements. However, alternative proposals in the Senate could expand the definition of intermediaries to include developers and front-end operators.
“We remain hopeful that this Congress will still pass clear and fair rules of the road for crypto,” the chapter presidents wrote, warning that weakening DeFi protections would signal that innovation is unwelcome domestically.
The group has increased political activity, including voter guides and candidate scorecards during recent state primaries.
The outcome carries implications beyond policy design. Stablecoin supply has grown into the hundreds of billions globally, and DeFi protocols continue to anchor liquidity across crypto markets. Any shift in US regulatory posture could influence where projects launch and scale.
Lawmakers are expected to hold hearings and amendments in the coming weeks, with market participants closely watching whether compromises emerge on stablecoin rewards and DeFi definitions as the next legislative catalyst.
