The US Senate crypto bill restricts passive income from stablecoins, and banks' advantages will further expand by 2026.

In January 2026, the US took a significant step forward in cryptocurrency regulation. The Senate released the full text of the Virtual Asset Market Structure Act, a 278-page bill that is seen as a crucial turning point in the US digital asset regulatory framework. Overall, public attention has mainly focused on DeFi regulation and token classification, but one clause regarding stablecoin yields is quietly changing the competitive landscape between the crypto industry and traditional banks.

According to the latest draft, the US Senate’s cryptocurrency bill explicitly restricts “passive stablecoin yields.” The clause states that companies cannot pay interest solely because users hold stablecoin balances; rewards must be tied to actual usage behaviors, such as staking, providing liquidity, trading, serving as collateral, or participating in network governance. This means that the previously offered “deposit-like yield” models for some stablecoin products will face significant regulatory constraints.

In summary, this regulation has a particularly direct impact on retail users. Ordinary investors holding only stablecoins will find it difficult to earn stable yields, while traditional banking systems can still legally pay interest on deposits. Eleanor Terrett, host of Crypto in America, pointed out that the bill clearly favors banks in terms of stablecoin yields. The relevant clause is on page 189 of the draft and has substantial implications.

Time factors also amplify market uncertainty. Senators have only a 48-hour window to submit amendments before formal review, and the final version has yet to be finalized. If this clause remains unchanged, the attractiveness of crypto platforms for conservative retail funds may decline, forcing users to choose between increased participation in DeFi and returning to the banking system.

Beyond yield restrictions, the bill also sends a relatively positive signal regarding token regulation. The draft classifies mainstream tokens such as XRP, SOL, LTC, HBAR, DOGE, LINK, alongside BTC and ETH under similar regulatory frameworks, which helps reduce compliance uncertainty and provides clearer market expectations. At the same time, the bill introduces a compromise approach for DeFi, aiming to prevent regulatory arbitrage while avoiding overburdening non-custodial developers.

Senator Cynthia Lummis views this bill as an important milestone in promoting innovation to stay in the US and emphasizes that transparent regulation helps protect consumers. Overall, this bill is not only a regulatory text but could also reshape the US stablecoin market structure in 2026, encouraging active participation in DeFi while consolidating the long-term advantages of traditional banks in passive income domains.