Sen. Moreno’s Stablecoin Solution

Summary of Sen. Moreno’s Stablecoin Solution

by Puck | Audacy

29m•February 7, 2026
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Overview of The Powers That Be — Sen. Moreno’s Stablecoin Solution

This episode presents Puck’s Power Breakfast conversation (recorded for The Powers That Be) between Leanne Caldwell and Republican Senator Bernie Moreno (R‑OH), a member of the Senate Banking Committee. Moreno — a former auto-dealer and blockchain entrepreneur who built a company using blockchain for state digital car titles — explains his priorities for crypto policy in the Senate, defends the recently passed “Genius Act” stablecoin framework, pushes for a separate market‑structure bill, and describes negotiations (and roadblocks) on yields, regulatory jurisdiction, taxation, and related politics. The episode is sponsored by the Solana Policy Institute, which urges updated IRS guidance and U.S. leadership in crypto.

Key takeaways

  • Moreno is pro‑innovation: he wants U.S. law to enable crypto and stablecoin development domestically rather than push builders offshore.
  • He supports the Genius Act (stablecoin framework) and argues it should not be re‑opened; doing so undermines regulatory certainty.
  • The market‑structure bill (the Senate’s broader crypto market rules) is stalled largely over the “yield” issue—whether stablecoin issuers can pay third‑party yields—and over special‑interest/political fights.
  • Banks’ claim that stablecoins will cause massive deposit flight (e.g., a $6 trillion number) is, in his view, exaggerated and used as a tactic to block legitimization of the crypto industry.
  • Moreno wants fixes to Title I (which he says would give the SEC too much first‑mover jurisdiction) and clarifications on DeFi, but thinks those problems are solvable.
  • He favors modernizing tax guidance (e.g., staking taxation) to spur Main Street adoption and prevent capital from leaving the U.S.
  • On ethics: Moreno argues Congress shouldn’t rewrite constitutional emoluments rules; he says members should be restricted from trading on insider information rather than barred from owning classes of assets.
  • He attempted bipartisan negotiations to extend enhanced ACA subsidies with gating reforms (income caps, minimum premiums, phased step‑downs), but claims Senate leadership blocked a deal.

Topics discussed

Stablecoins, the Genius Act, and market structure

  • The Genius Act (stablecoin-specific rules) passed; Moreno insists it should remain intact to provide certainty.
  • Market structure is broader (covers exchanges, custody, DeFi, etc.) and is essential for industry scale; Moreno thinks 90% of the crypto policy fight is market structure.
  • He argues the Senate should move the market‑structure bill forward and not re‑open Genius, which would undercut investor confidence.

Yield debate and banks’ opposition

  • Core sticking point: whether stablecoin issuers/affiliates can pay interest/rewards to holders.
  • Banks and some congressional allies fear deposit flight; Moreno calls those claims overstated and politically motivated.
  • His view: if the market‑structure bill stalls, the Genius Act remains law; regulators (OCC, Fed) could respond if large systemic shifts occur.

Regulatory jurisdiction and Title I

  • Title I (as drafted in parts of the bill) would give the SEC dominant first jurisdiction over issuers — Moreno sees this as risky (could allow a Gensler‑style regulator to crush industry).
  • He wants Title I revised to prevent excessive SEC domination and to ensure predictable rules.

DeFi and understanding the technology

  • Many legislators don’t fully grasp DeFi, which complicates drafting effective rules.
  • Moreno believes tweaks can resolve DeFi concerns once lawmakers better understand use cases and risks.

Tax policy and staking guidance

  • Current IRS/tax treatment is outdated and creates compliance burdens (e.g., staking rewards taxation timing).
  • Solana Policy Institute sponsorship message: tax guidance should tax staking rewards on disposition (sale), not at receipt, to avoid locking value and driving capital offshore.
  • Moreno: tax modernization is necessary but depends on progress on market structure.

Ethics, family businesses, and congressional ownership of crypto

  • Debate over limiting family members’ business activity and whether Congress should ban certain asset ownership.
  • Moreno sold his business interests and digital assets before taking office to avoid conflicts.
  • He favors banning insider trading by members (or similar reforms), but not blanket bans on owning a class of assets (e.g., crypto vs. gold).

Affordable Care Act (enhanced subsidies)

  • Moreno worked on bipartisan talks to extend enhanced ACA subsidies with reforms (income caps, minimum premiums, phased reductions, HSA options).
  • He says negotiations stalled because Senate leadership preferred political messaging to a deal.

Notable quotes

  • “We can't come back in January and say, when we passed that bill, we've got to rethink it because we don't like what we just did — which is totally insane.”
  • “The idea that banks are saying there's going to be $6 trillion in deposit flight is totally insane…that’s just a…fake argument.”
  • “The next generation of finance is here…Do we want it to be built in America or not? That’s the only question at play here.”

What to watch next

  • Whether the Senate moves a market‑structure bill to markup and whether Title I gets revised to limit SEC first‑mover jurisdiction.
  • Ongoing regulator (OCC, Fed) rulemaking tied to stablecoin implementation and potential supervisory responses.
  • Congressional action on tax guidance for digital assets (staking rules) and formal legislative proposals to address member trading/ownership rules.
  • Any bipartisan deal or floor action to extend ACA enhanced subsidies before they lapse.

Practical implications and recommendations

  • For builders/investors: pressure for legislative clarity matters — market‑structure progress is the priority for scaling US crypto businesses; monitor Title I changes.
  • For banks: substantive engagement, not fear‑driven PR, could shape workable compromise (e.g., guardrails mitigating disintermediation risk).
  • For legislators/policy staff: focus education on DeFi, tokenization use cases, and practical consumer effects to reduce fear‑driven policy outcomes.
  • For taxpayers/retail holders: advocate for tax modernization (staking taxed on sale/disposition) to avoid locked‑in liabilities and encourage US investment.

Note: the transcript alternates between “Marino” and “Moreno.” This guest is Senator Bernie Moreno (R‑Ohio), a first‑term senator and former blockchain entrepreneur.