Coinbase Pushes Back as Lawmakers Debate Stablecoin Rewards in CLARITY Act

US crypto exchange Coinbase is stepping up efforts to influence lawmakers as Congress moves closer to a decision on the CLARITY Act, a sweeping crypto market structure bill that could restrict decentralized finance activity. The focus is on stablecoin rewards, a feature Coinbase views as critical to its business model.

A Bloomberg report said Coinbase may reconsider its support for the CLARITY Act if the bill blocks stablecoin issuers from offering rewards through crypto exchanges and other platforms. Coinbase has not publicly confirmed the stance, but the position reflects growing tension between crypto firms and traditional banking groups.

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Stablecoin Rewards at the Center of the Fight

Banking industry groups argue that stablecoin rewards act like interest-bearing deposits and could pull large sums out of the traditional banking system. Treasury estimates from April show that widespread stablecoin adoption could draw as much as $6.6 trillion from banks.

The GENIUS Act, passed in July, already bans stablecoin issuers from paying interest directly to token holders. However, it does not clearly block exchanges or third parties from offering rewards. That gap has allowed firms like Coinbase to continue offering yield through platforms tied to stablecoins such as Circle’s USDC, which pays roughly 3.5%.

Coinbase has applied for a national trust banking charter, which would give it clearer legal ground to offer rewards. Banking groups are pushing to close this path through the CLARITY Act.

Heavy Lobbying From Both Sides

Political pressure around the bill is increasing. An anti-DeFi group has been running television ads urging voters to pressure senators to ban DeFi provisions that banks claim threaten financial stability.

At the same time, the crypto community has mobilized. Stand With Crypto said more than 135,000 emails have been sent to senators in support of stablecoin rewards and DeFi protections.

The US Senate Banking Committee is scheduled to debate the issue during a markup session this Thursday, setting up a key test for the bill’s direction.

Stablecoins have become a major revenue source for Coinbase. The company generated nearly $247 million from stablecoin-related activity in the fourth quarter, alongside $154.8 million from blockchain rewards. A full ban on rewards would directly hit earnings.

Despite the urgency, passage of the CLARITY Act may take time. TD Cowen’s Washington Research Group expects delays tied to the 2026 midterm elections, pushing passage to 2027 and full implementation to 2029. However, senate Banking Committee Chair Tim Scott maintains that the bill can move faster and produce results sooner.

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