Coinbase Might Exit Support For CLARITY Act Over Conflicts

Coinbase, one of the largest U.S.-based crypto exchanges, may withdraw its support for the CLARITY Act if the bill imposes restrictions on stablecoin reward programs, according to a Bloomberg report. 

The warning comes as Congress prepares to mark up the legislation in the Senate this week, setting up a potential clash between regulators and one of crypto’s most prominent companies.

For Coinbase, stablecoin rewards are not a minor perk — they are a core part of its revenue model. The exchange shares in interest income generated from reserves backing USD Coin (USDC), the widely used stablecoin issued by Circle, in which Coinbase owns a minority stake. Part of that income is used to offer incentives to users, including roughly 3.5% rewards for Coinbase One customers. 

These programs encourage users to keep USDC on the platform, creating a predictable revenue stream even when trading activity slows. Bloomberg estimates that stablecoin-related revenue may have reached around $1.3 billion in 2025.

The heart of the debate is whether these rewards resemble traditional banking products, such as interest-bearing accounts, or whether they are consumer incentives that belong in a crypto-specific regulatory framework. 

Some banking groups argue that allowing yield on stablecoins could pull deposits away from traditional banks, potentially reducing lending to households and small businesses. 

The act is expected to be marked up this week on January 15. This ongoing issue could have broad effects on the bitcoin and crypto space. 

Coinbase: Stablecoin rewards are under threat

Coinbase and other crypto advocates counter that treating rewards like bank interest would stifle innovation, make U.S. platforms less competitive globally, and risk pushing users offshore.

Coinbase’s stance illustrates the broader tension between lawmakers seeking investor protection and companies trying to maintain viable business models in the emerging crypto sector. 

While the CLARITY Act aims to clarify market structure rules for digital assets — defining categories like digital commodities, investment contracts, and payment stablecoins— it also signals Congress’s growing interest in stablecoin oversight and decentralized finance.

The timing is significant. The Senate Banking Committee will soon review the bill, and its final provisions could shape the future of U.S. crypto policy. Coinbase’s potential withdrawal of support is somewhat of a negotiation tactic and it reflects how critical stablecoin yield programs have become for regulated exchanges. 

Limiting these incentives could reduce adoption of U.S.-based platforms and slow mainstream engagement with digital currencies.

The dispute also highlights the human element of regulation. Companies like Coinbase are balancing compliance, investor expectations, and global competitiveness, while lawmakers weigh the need for oversight against the risk of stifling innovation.

Coinbase has not made an official statement, but insiders speaking to Bloomberg suggest the exchange is carefully evaluating whether the final text will allow it to continue offering rewards while staying aligned with U.S. law.