Bitcoin (BTC) has been drawn into a U.S. stablecoin policy debate after 134 banking representatives and executives asked Senate leaders to tighten Section 404 of the CLARITY Act.

In a letter dated July 28, the American Bankers Association said the bill’s current language could allow digital-asset service providers to offer holders economic benefits that operate like deposit interest through membership or reward programs. The signatories warned that such payments could shift funds out of bank deposits and into stablecoins, potentially weakening the deposit base that supports household, small-business, and agricultural lending.

The bankers did not ask lawmakers to block the broader market-structure bill. Instead, they urged Congress to revise the reward provision so that its intent to prohibit yield-like payments is not undermined. The ABA described the appeal as an effort to preserve innovation while protecting deposit-funded lending. The letter said deposits remain a core funding source for community lending and argued that allowing deposit-like returns on stablecoins would raise the likelihood that bank funding migrates to digital assets.

Because Bitcoin often helps set the regulatory tone for the wider altcoin complex, any change to stablecoin distribution rules could influence exchange incentive programs, custody offerings, and liquidity venues that connect fiat and crypto markets.

Separately, South Korea’s National Assembly Finance and Economy Committee has weighed in on the country’s debate over whether to scrap planned crypto taxation, advising lawmakers to move cautiously.

Senior committee specialist Choi Byung-kwon wrote in a July 29 review of an income tax amendment that abolishing taxation on digital-asset income could reduce trust in tax administration and create market instability. The amendment, introduced in March by Song Eon-seok, would reverse a policy that has already been delayed several times.

Choi acknowledged arguments that scrapping the tax could be fair after the separate financial investment income tax was abolished, and that the enforcement infrastructure remains incomplete. Even so, the report treats the earlier decision to tax digital-asset income as a commitment that should not be easily withdrawn. He said the review should weigh both the credibility of tax administration and the potential market impact, while recognizing that the unfinished infrastructure weakens the case for a smooth rollout.

The committee did not propose a new tax rate, but its position suggests that repeal would require stronger justification than political disagreement alone. For the broader altcoin market, the issue matters because South Korea remains one of the most active retail trading jurisdictions, and changes to tax liability can affect turnover, reporting behavior, and exchange compliance costs.

The report also placed Korea’s tax debate in an international context, noting that the United States, Japan, the United Kingdom, France, Germany, Canada, and Australia already tax digital-asset income. That comparison strengthens the case for keeping the current direction, even as implementation questions remain.

According to the review, the government still plans to begin taxing digital-asset income on Jan. 1, 2027, while the ruling Democratic Party has not shown clear opposition to the framework. The People Power Party, however, continues to argue for abolition or further delay. Choi said it is difficult to determine whether the systems needed for 2027 are fully ready because no additional enforcement infrastructure has yet been put into operation.

The report therefore recommends further deliberation through the tax subcommittee rather than a quick reversal. It also notes that repeated postponements have not removed the underlying legal obligation, leaving market participants with an uncertain compliance horizon. For Bitcoin and other major tokens, especially after prices retreated from a prior all-time-high phase, the central issue is not only the statutory rate, but also whether exchanges and taxpayers can reliably calculate cost basis, track transfers, and file reports without triggering abrupt trading disruptions.

COINOTAG analysis said the common thread is legitimacy: Washington is trying to define what stablecoin rewards are permitted, while Seoul is testing whether a delayed tax regime can be credibly enforced. With COINOTAG’s Fear and Greed Index at 29/100 and Bitcoin dominance at 69.7%, capital remains concentrated in the largest asset while sentiment stays cautious. Total crypto market capitalization of about $1.84 trillion means rule changes affecting bank deposit competition or tax compliance can move sector flows quickly. Unlike a one-time airdrop, recurring rewards and tax obligations shape long-term behavior.

The primary documents show regulators and lawmakers are no longer debating whether crypto exists, but how it fits within deposit protection, tax administration, and cross-border policy norms.

COINOTAG does not provide financial advisory services. This content is for informational purposes only and should not be considered investment advice. Cryptocurrency investments involve high risk.