Bank Groups Say Senate Stablecoin Rewards Proposal ‘Falls Short’

Bank groups pushed back Monday on a crypto market structure proposal, escalating pressure on US lawmakers to continue negotiations over a key stablecoin rewards provision.

Leading industry associations said the latest draft “falls short” despite Coinbase Global Inc. saying last week that a deal had been reached on the contentious issue of stablecoin yield. Democratic Senator Angela Alsobrooks also said earlier Monday that she believed they had “resolved” a dispute over the rewards.

At stake is whether stablecoins, paired with exchange-run reward programs, begin to function like yield-bearing cash accounts — a shift banks warn could draw deposits away from ...