Lawmakers are struggling to bridge a growing divide over coinbase stablecoins as fresh legislative text again fails to win over the largest US exchange.
New clarity bill, same pushback from Coinbase
In January, Coinbase CEO Brian Armstrong used X to torpedo a planned Senate Banking Committee markup, declaring the company could not support the Digital Asset Market Clarity Act. The intervention forced the hearing off the calendar and signaled a hard line on stablecoin policy.
Now, after lawmakers released new compromise language for the same bill, the exchange is again signaling resistance. However, this time it comes against the backdrop of growing alignment between banks, other crypto firms, and the White House.
The revised text, unveiled March 20 by Senators Thom Tillis and Angela Alsobrooks with administration backing, aims to set clearer rules for stablecoin rewards programs. Yet industry insiders say the details could still reshape business models across the sector.
Details of the Tillis-Alsobrooks compromise
The compromise would ban rewards paid simply for holding a stablecoin, closing off yield-style products based solely on balance size or duration. Moreover, it would still permit activity-based rewards tied to payments, spending, or platform usage, carving out a narrower but still meaningful lane for incentives.
Banks appear to have secured the outcome they most wanted: a clear prohibition on balance-based rewards that resemble deposit interest. Crypto platforms, by contrast, are left with a constrained framework, and the definition of what qualifies as activity-based rewards remains, according to sources familiar with the draft, frustratingly vague.
The bill gives the SEC, CFTC, and Treasury 12 months to write detailed rules. However, that timeline offers little immediate certainty for exchanges trying to plan revenue strategies in a competitive global market.
Industry reaction and market backdrop
Crypto insiders who attended a closed-door Capitol Hill briefing on Monday described the language as overly restrictive. One person familiar with the industry’s first look called the opening impression a clear letdown, underscoring the gap between policymakers and platforms.
The debate plays out against a bullish market backdrop. BTCUSD is now trading at $70,749, according to data from TradingView, highlighting renewed risk appetite even as Washington wrangles over the framework for dollar-pegged tokens.
That said, the legislative focus is squarely on stable-value assets rather than bitcoin, reflecting regulators’ concern about payments, consumer protection, and links to the traditional banking system.
What is at stake for Coinbase’s business model
The financial stakes behind Coinbase‘s opposition are significant. Stablecoin-related revenue accounted for roughly 20% of the company’s total earnings in the third quarter of 2025, making the segment a core profit driver rather than a side business.
Reports indicate the exchange generated $1.35 billion from stablecoins in 2025 alone, with most of that tied to USDC distribution arrangements with Circle. Any rule that limits yield for passive holders could therefore bite directly into a key revenue stream.
Armstrong’s public argument centers on structure. According to him, USDC rewards are not a traditional deposit product but a form of revenue sharing from interest earned on Treasury bills held in reserve. However, that distinction is precisely what lawmakers are now probing.
Policy pressure and mounting political alignment
Treasury Secretary Scott Bessent has already criticized what he described as recalcitrant actors resisting compromise, urging the Senate to pass the bill this spring. His comments underline the administration’s view that a negotiated framework is preferable to regulatory ambiguity.
Banks, large parts of the crypto industry, and the White House now appear increasingly aligned around the Tillis-Alsobrooks approach. Coinbase stablecoins positioning, however, remains out of step, leaving the company isolated in the latest round of talks despite its market stature.
Moreover, that isolation could shape future negotiations on digital asset oversight, as policymakers weigh who has engaged constructively with the process and who has not.
A fragile timeline for US stablecoin legislation
The bill still faces several hurdles before it can become law, including a full Senate floor vote, which will require 60 votes, and reconciliation with the House version that passed in July 2025. Each step opens new avenues for delay or amendment.
Senator Bernie Moreno has been explicit about the stakes. If the bill does not reach the Senate floor by May, he has warned, crypto legislation could effectively go dark until after the midterm cycle, pushing any regulatory clarity well into the future.
The global stablecoin market currently stands at $316 billion, underscoring why lawmakers are reluctant to leave this corner of finance in limbo. However, the clock is running, and Coinbase has made clear it is not ready to back the present deal.
In summary, the Digital Asset Market Clarity Act remains mired in negotiation, with banks, the White House, and many crypto firms moving toward compromise while Coinbase holds out, leaving both its stablecoin revenues and the wider US regulatory path hanging on an increasingly tight political timeline.
Source: https://en.cryptonomist.ch/2026/03/26/coinbase-stablecoins-tillis-alsobrooks/
