Coinbase Global Inc. threatens lawmakers on notice, reporting that they might walk away from the CLARITY Act if it restricts stablecoin rewards beyond the basic disclosure rules. Coinbase supports any provisions about customer rewards that require more transparency rather than outright restrictions and major limitations. Experts opine that the exchange views the issue as crucial to its business and competition in the stablecoin market.
How Coinbase is Affected
Coinbase shares interest income from reserves backing Circle’s USDC. They use part of the income to offer incentives to their users, which can approximately be 3.5% rewards for some Coinbase One account holders. It is these incentives that encourage users to keep their stablecoins on the platform, thereby creating a steady revenue stream. According to Bloomberg, Coinbase’s stablecoin-related revenue might have reached about $1.3 billion in 2025, and if the rewards are terminated or limited, then only a few users may hold USDC on the particular platform, putting their income at risk. Coinbase also owns a minor stake in Circle, thus deepening its exposure to the stablecoin economy.
Additionally, Coinbase has asked the regulators for a national trust charter that would eventually qualify it to provide rewards within these tight rules. However, the crypto companies want to keep providing rewards despite such approvals.
Why Existing GENIUS Act Matters
Trump’s second term brought rapid victory for digital money companies. After Trump signed the GENIUS Act in July, stores and traditional finance companies rushed to announce stablecoin plans. While the administration demands more bills to be passed quickly, the rewards question has damaged the bipartisan agreement on the market bill. The former co-head of the office of Government Affairs at Goldman Sachs and chief policy officer at Coinbase posted on X that “The Senate Banking Committee marks up the Market Structure bill next week, and stablecoin rewards remain under debate. Congress already settled this in GENIUS—reopening it now only creates uncertainty and risks the future of the US Dollar as commerce moves on-chain. Here’s why Congress should protect the GENIUS Act, and why rewards help consumers without harming community banks. He also added that keeping stablecoin rewards will aid in maintaining dollar dominance, pointing out that China recently said it would pay interest on its digital yuan.
In the background of rising political pressure, it is important to consider the contribution of Coinbase at the time of the 2023-24 election cycle, making the crypto industry one of the largest corporate political spenders. Coinbase’s threat to pull support carries weight in this scenario as lawmakers try to maintain momentum behind broader market structure reforms.
Difficulty Lawmakers Encounter
The outcome is uncertain as the Senators are positioned in a critical situation, as the administration is pressured to pass the legislation quickly, while dealing with a diverse issue that doesn’t have an easy resolution. Lawmakers might allow crypto firms to regulate stablecoin rewards like the banks, while traditional banks may not agree to this, as it lets the crypto firms compete with them. Many crypto companies have already received preliminary approvals for national trust bank status, despite the opposition from the banking groups.
