Tensions are building to get a hearing on the calendar to advance crypto market structure legislation.

On Monday evening, Sen. Thom Tillis (R-N.C.), a key negotiator on the Senate Banking Committee in getting a broader bill passed into law, told reporters that he does not expect the committee to hold a hearing to amend and vote on the bill in April, according to a report from Punchbowl News. 

Sens. Tillis and Angela Alsobrooks (D-Md.) have been pivotal in ironing out a "main blocker" around the treatment of stablecoin rewards. The issue was tackled in the GENIUS stablecoin legislation approved in July, which bars stablecoin issuers from paying interest straight to holders. Still, it doesn't prevent outside platforms — such as Coinbase — from providing rewards. Banking industry representatives argue that allowing these kinds of returns could draw deposits away from traditional banks, potentially weakening community institutions.

Meanwhile, crypto firms push back, claiming that restricting rewards would stifle innovation.

Tillis and Alsobrooks have been working on language to settle how stablecoin rewards should be treated. As of last week, a source familiar with the matter told The Block that the draft language currently reflects prior language that would ban rewards on idle stablecoin holdings in accounts, while allowing yield on activity like transactions. It would be difficult to make substantive changes to the text at this point, according to the source.

Late last week, Punchbowl News reported that bank trade associations were taking their concerns in the latest version of that language to other senators on the Senate Banking Committee. 

Tensions rise

Pressure has been mounting to get a bill passed, with a push to get a markup hearing in April. A version of the bill passed out of the full House almost a year ago and the legislation advanced out of the Senate Agriculture Committee on partisan lines earlier this year. If the legislation is advanced out of the Senate Banking Committee, it would need to be combined with the Senate Agriculture Committee's version, and then go to a full floor Senate vote before being reconciled in the House. 

In March, Sen. Cynthia Lummis (R-Wyo.) told a crowd at the DC Blockchain Summit that the committee was eyeing an April vote. At the same conference, Sen. Bernie Moreno (R-Ohio) warned that the next few months would be critical, adding that if the bill did not get passed by May, "digital asset legislation will not pass for the foreseeable future."

The committee has faced multiple hurdles over the past year. Broadly, a future bill would clarify regulatory jurisdiction between the Commodity Futures Trading Commission and the Securities and Exchange Commission, define when digital assets qualify as securities or commodities, and establish new disclosure requirements. 

Tillis told Senate Banking Committee Chair Tim Scott (R-S.C.) that the panel should be looking at May to mark up the bill, Punchbowl News reported.

Spokespeople for Scott, Alsobrooks and Tillis did not immediately respond to a request for comment. 

As for this week, much of the attention in the Senate Banking Committee will be turned to a hearing on Tuesday morning on the nomination of Federal Reserve Chair pick Kevin Warsh. 

On Monday, The Digital Chamber CEO Cody Carbone sent a letter to Tim Scott and Elizabeth Warren, top Republican and Democrat on the Senate Banking Committee, urging them to "advance digital asset market structure legislation to a markup as soon as the calendar allows." 

"Doing so is critical to delivering the clarity that the more than 70 million Americans who have embraced digital assets deserve, while reinforcing the United States' leadership in responsible innovation and next-generation financial technology," Carbone said in the letter.