TLDR
- Kevin O’Leary believes Congress may pass crypto market legislation before the midterm elections.
- He said staffers are spending most of their time drafting and negotiating the bill.
- The main disagreement is over whether stablecoin rewards should apply to idle balances.
- Coinbase withdrew its support for the bill just before a planned vote.
- Ripple and other industry leaders continue to support the legislation and call for cooperation.
U.S. investor Kevin O’Leary said Friday that Congress may pass crypto market regulation before the midterm elections. Speaking to CoinDesk, O’Leary expressed optimism that lawmakers could finalize the bill as early as May 15. He emphasized that legislative staff are heavily involved in writing the bill and working through key disagreements.
Fight Over Stablecoin Rewards Holds Up Progress
O’Leary said the unresolved debate over stablecoin rewards causes most of the current delay in finalizing the legislation. He estimated that “about 90% of the uncertainty” comes from disagreements on how to handle those rewards.
He criticized a proposal that could prevent platforms from offering yields on idle stablecoin balances, calling it anti-competitive. “It creates an uneven playing field,” O’Leary told CoinDesk, pushing for a compromise that supports fair conditions across platforms.
Lawmakers continue to debate whether rewards should apply only to active usage or extend to passive holdings of stablecoins. Some industry leaders prefer allowing stablecoin yields while ensuring compliance standards for issuers and platforms remain in place.
Coinbase recently withdrew its support for the bill hours before a scheduled vote, citing fairness concerns. Coinbase CEO Brian Armstrong argued that users should retain the right to earn yield on their stablecoin holdings.
He said the platform backs “a level playing field” and supports yield rates of around 3.8% on stablecoin deposits. The move led lawmakers to postpone the bill’s markup indefinitely, putting its timeline at risk again.
Galaxy Digital CEO Mike Novogratz suggested a middle ground where rewards apply only to active stablecoin usage. That compromise may offer a path forward, but no agreement has been reached publicly yet.
Crypto Market Regulation Bill Faces Political and Economic Pressures
O’Leary believes crypto market regulation now dominates lawmakers’ staff schedules as they try to finalize legislative text. “They’re spending probably 80% of their day” on it, he said, referring to the intensive drafting process.
He maintained confidence that the bill could pass Congress by mid-May despite months of missed deadlines and market challenges. His prediction aligns with pressure from industry figures who want clarity before the 2026 election cycle intensifies.
Ripple CEO Brad Garlinghouse called the bill a “massive step forward” and urged continued industry collaboration with lawmakers. He urged all parties to remain engaged even as key provisions remain unresolved.
The crypto market has struggled in recent months, with Bitcoin’s price falling sharply from its October 2025 peak. BTC now trades around $87,600, down from highs driven by early optimism in the Trump administration’s second term.
Prices fell after threats of 100% tariffs on China in late 2025 triggered mass sell-offs across the cryptocurrency space. The total crypto market capitalization dropped by nearly $1 trillion in just over a month.
O’Leary, who previously held 27 crypto positions, said he exited all of them during the downturn. “It’s been a bust,” he remarked, referring to the market reversal and failed gains in late 2025.
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