The financial innovation bill advanced by the U.S. Senate Banking Committee has once again stalled. The core disagreement between the parties centers on how to define yield-bearing stablecoins — traditional banks insist on classifying them as deposits, while crypto companies argue that doing so stifles the potential for financial innovation.

This is not the only issue. A leading exchange withdrew support due to restrictive provisions on DeFi and bans on tokenized stocks in the bill, and there have been some disagreements between the White House and industry leaders. Underlying these conflicts is actually a fundamental clash of underlying logics between two worlds.

The banking system seeks regulatory clarity and risk isolation. Every transaction must be traceable, and every asset must have a clear legal status. Crypto-native institutions, on the other hand, require operational flexibility. The core value of DeFi lies in financial composability — overregulation would lock in innovation.

Negotiations are ongoing, and it’s expected that several weeks will be needed before any new progress is made. But frankly, this tug-of-war itself represents a form of progress — at least everyone is willing to sit at the same table and talk. For projects and investors eager to clarify compliance boundaries, this back-and-forth indeed tests patience. Conversely, the slow pace of U.S. regulation has objectively given other countries and regions an opportunity to seize the initiative.