Coinbase Pushes Back on Senate Stablecoin Yield Plan

TLDR

• Coinbase informed Senate offices that it cannot support the revised CLARITY Act language on stablecoin yields.
• The updated Senate draft limits how stablecoin yield programs can operate and restricts deposit-like structures.
• Lawmakers left open questions about activity-based stablecoins and transaction reward classifications.
• Industry groups remain divided as some view the draft as restrictive while others support the compromise.
• Coinbase stock closed at $181, down nearly 5% from its opening price above $190.

Coinbase has told Senate offices it cannot support new language in the CLARITY Act. Lawmakers recently inserted the revised text during ongoing negotiations. The disagreement centers on stablecoin yield provisions and has disrupted talks on the crypto market structure bill.

CLARITY Act Revision Triggers Coinbase Objection

Senators revised the CLARITY Act to address stablecoin yield arrangements after months of negotiations. However, the updated draft narrows how companies can structure yield programs linked to stablecoins. Lawmakers aim to restrict products that resemble traditional bank deposits.

The Senate text limits structures that mirror interest-bearing accounts offered by banks. It also tightens the scope of other reward-based programs tied to stablecoins. As a result, Coinbase informed Senate staff that it could not back the compromise language.

Coinbase executives raised concerns about unclear definitions within the draft. The proposal leaves open how regulators would classify activity-based stablecoins. It also does not fully explain how transaction-reward programs would fall under the rules.

Therefore, the company declined to endorse the late-stage compromise. This move follows internal reviews of the proposed regulatory framework. Lawmakers continue discussions as they seek agreement on the bill’s final language.

Industry Divided As Debate Over Stablecoin Yields Continues

Industry reactions to the CLARITY Act draft have varied across trade groups. One major association told Crypto In America that the language differed from earlier White House discussions. The group described the text as more restrictive for crypto firms.

That association stated the changes departed from previously discussed policy goals. It argued that lawmakers introduced tighter controls on yield mechanisms. The group did not disclose whether it would formally oppose the bill.

In contrast, another trade group leader supported the revised provisions. The leader said the draft aligned with prior expectations. The source stated, “This is the best possible result.”

The same source added that the language appeared broader than an earlier proposal. Senators Thom Tillis and Angela Alsobrooks had advanced that earlier framework. The source said, “People will still get their rewards.”

Meanwhile, Coinbase CEO Brian Armstrong had opposed earlier versions of the bill in January. His earlier stance delayed the committee markup process. However, the company now uses a measured tone in its latest response.

Coinbase shares reacted during Wednesday trading following reports of the dispute. The stock, trading under the ticker COIN, closed at $181. The price reflected a drop of nearly 5% from its opening level above $190.

Lawmakers have not announced a new markup date for the CLARITY Act. Senate offices continue private discussions with industry representatives. Negotiations remain ongoing as both sides review the revised stablecoin yield language.

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