North Carolina Republican Emerges as Key Player in Stablecoin Yield Standoff
Senator Thom Tillis has been meeting with stakeholders but remains unconvinced, sources say
Welcome to the Monday edition of the Crypto In America newsletter!
What you’ll read: On the issue of stablecoin yield, Senator Thom Tillis (R-NC) holds all the cards; GOP lawmakers insist on a permanent CBDC ban; plus, what we’re watching this week.
The stablecoin yield debate that has held up the Clarity Act for nearly two months has a new moderator: Senator Thom Tillis, a North Carolina Republican who has been sympathetic to the banks’ argument that giving too many concessions to the crypto industry on rewards could trigger deposit flight.
Tillis last week met industry and White House officials several times, and has reviewed legislative text from the past month of negotiations between the crypto industry and the banks. Industry sources say the talks are “moving in the right direction,” but are not quite there yet.
“Sen. Tillis has been very receptive to our discussions about stablecoin yield,” Cody Carbone, CEO of Digital Chamber, told Crypto In America. ”I am optimistic we will find a way to get to a ‘yes’ vote on the bill, and we appreciate his work to try to advance market structure rules of the road.”
But Tillis is unconvinced by some of the arguments he’s been hearing and is considering “holding court” with representatives from Coinbase and banking trade groups together in his office to hear them out personally, according to an industry source who requested anonymity.
“He wants to have each make their case before deciding,” the source said, noting that the extra time this could take might turn the White House off the idea, leaving it unclear whether the meeting will happen.
You might ask: Why so much deference to Tillis on this issue?
Tillis was shaping up to be a holdout in January when the Senate Banking Committee was preparing for a markup. Coinbase even cited amendments from Tillis and Sen. Angela Alsobrooks (D-MD), which limited the scope of stablecoin rewards, as one reason it withdrew support for the bill, prompting the Banking Committee to pull the markup.
Even if no Democrats vote to advance the Clarity Act during the next markup, it could still pass along party lines. But Tillis’ vote will be crucial if there’s no Democratic buy-in.
Press representatives for Tillis did not respond to a request for comment.
Meanwhile, other stakeholders focused on different parts of the legislation say the yield issue has “taken a lot of oxygen out of the room,” and left sticking points, mostly around DeFi, largely unresolved. Senate Democrats are now scrambling to address these remaining issues, per a DeFi leader involved in negotiations, and concerns around ethics and conflicts of interests over government officials and their family members owning crypto are also expected to remain top of mind for some Democratic members.
Trade groups are starting to consider alternatives if the Senate markup slips further into the year, but remain “cautiously optimistic” that progress over the next three weeks on yield, rewards, and other issues will allow the Banking Committee to reschedule a markup in late March, one crypto trade executive said.
GOP Lawmakers Rally Behind CBDC Ban
A ban on the Federal Reserve issuing a central bank digital currency (CBDC) to the general public has shown up in the Senate’s 21st Century ROAD to Housing Act.
The problem: The ban comes with a 2030 sunset clause, meaning it expires after four and a half years. Many Republicans and crypto advocates, who fear a CBDC could mark the start of government financial surveillance, are up in arms and wondering whether the provision could open the door for the Fed to explore a CBDC in 2031.
The temporary ban is being criticized as a “watered-down version” of Rep. Tom Emmer’s Anti-CBDC Surveillance State Act, which passed the House last year and established a permanent ban on a so-called “retail CBDC.” The bill was originally slated to be attached to last year’s defense bill, but was eventually removed.
Last week, Sen. Ted Cruz (R-TX), a staunch critic of CBDCs who introduced the Senate version of the Anti-CBDC Surveillance State Act last year, filed an amendment to strike the sunset on the ban. Cruz plans to push for a vote on the amendment when the Senate holds a series of votes on the housing legislation this week, sources close to him told Crypto In America.
Meanwhile, a coalition of 32 Republican House members is weighing in on the CBDC provision before the legislation returns to the lower chamber. In a letter to House Majority Leader John Thune (R-SD) and Speaker Mike Johnson (R-LA), Rep. Michael Cloud (R-TX) led the group in “expressing the dire need to prohibit a Central Bank Digital Currency from ever happening in the United States.”
“A prohibition of a Central Bank Digital Currency must be permanent,” the letter reads. “Otherwise, we will do everything we can to ensure the 21 Century ROAD to Housing Act is dead-on arrival.”
The letter goes on to describe a CBDC as exposing Americans to “unconstitutional financial surveillance” and giving “the unelected Federal Reserve unprecedented power over Americans’ finances that would violate their civil liberties and financial freedom.”
Congresswoman Anna Paulina Luna (R-FL), a signatory of the letter, took to X on Friday, warning that the battle over CBDCs could get ugly.
“This will probably get nasty so I am telling everyone now. We would appreciate your [sic] support on this.”
👀 What To Watch This Week
Monday
The House is out this week. The Senate is in session.
3:45 p.m.: Day 1 of the annual FIA Global Cleared Markets Conference, aka the “Boca” conference, kicks off in Boca Raton, Florida, with a keynote from CFTC Chairman Michael Selig.
Tuesday
8:30 a.m.: The U.S. Bureau of Labor Statistics releases the February reading of the Consumer Price Index (CPI), a key measure of inflation.
Prudential regulators including Michelle Bowman (Fed vice chair for supervision), Travis Hill (FDIC chair) and Jonathan Gould (U.S. comptroller of the currency) speak at Day 2 of the American Bankers Association Summit.
1:30 p.m.: SEC Chairman Paul Atkins gives a keynote speech at the Boca conference.
Wednesday
Crypto wallet Exodus Movement (EXOD) reports earnings before the opening bell.
10:15 a.m.: Crypto and TradFi exchange CEOs take part in a panel on the final day of the Boca conference, featuring Craig Donohue (CBOE), Jeff Sprecher (ICE), Kris Marszalek (Crypto.com), Arjun Sethi (Kraken), and Haider Rafique, global managing partner at OKX.
Thursday
Bitcoin miner Cango (CANG) reports earnings after the closing bell.
Friday
Ethereum treasury and staking company Bit Digital (BTBT) reports earnings before the opening bell.
8:30 a.m.: The U.S. Department of Commerce releases its first Q4 GDP revision, and January personal consumption spending data.
Weekend News Flash
Nasdaq is teaming up with Kraken to offer tokenized stocks, following NYSE’s $25B investment in OKX to bring tokenized equities to its crypto users.
A new Executive Order signed by President Trump targets cybercrime and includes federal support to secure blockchain networks against hacks and quantum threats.
Kalshi is facing a class action lawsuit from traders who say the prediction market used a “death carveout” to dodge payouts on $54M of bets tied to Iran’s former supreme leader, Ayatollah Ali Khamenei.
A New York federal judge dismissed a lawsuit by 535 victims of 64 terrorist attacks between 2016 and 2024, who claimed Binance helped finance groups behind the attacks, ruling they couldn’t establish a plausible connection.
A new report from the Treasury Department says: crypto mixers can serve valid privacy purposes; calls for a “hold law” safe harbor letting authorities temporarily hold or freeze suspicious digital assets while investigations proceed; and urges Congress to define which DeFi actors face anti‑money laundering (AML) and counter‑terrorist financing (CFT) obligations.
Remember, new editions of the Crypto In America newsletter drop every Monday and Wednesday.
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