Crypto Bill Clash: Coinbase Rejects CLARITY Act Changes On Stablecoin Yields

Cryptocurrency exchange Coinbase has reportedly told Senate offices it cannot support the latest language inserted into the CLARITY Act, dealing a fresh setback to negotiations over the anticipated crypto market-structure bill. 

The dispute centers on newly revised provisions governing stablecoin yield arrangements, a key point of contention that has been the subject of months of talks on Capitol Hill.

The Senate’s updated text would constrain how stablecoin yield programs operate, limiting structures that try to mirror bank deposit products and tightening the permissible scope of other activities. 

The draft leaves open questions over the mechanisms for classifying activity-based stablecoins and how transaction-reward programs would be treated. 

Those uncertainties, combined with what some in the industry view as more restrictive wording, prompted Coinbase to inform lawmakers this week that it could not back the late-stage compromise language.

The move marks a softer but still consequential reversal from Coinbase CEO Brian Armstrong’s more forceful opposition in January, which previously stalled the bill’s markup. 

Beyond Coinbase, industry responses to the new draft have been mixed. One major trade association told Crypto In America that the revised language represented a marked departure from what had been discussed with the White House, and described the text as more restrictive for the crypto sector. 

In contrast, another trade group leader characterized the provisions as largely in line with expectations, arguing they struck an acceptable balance by preserving rewards while preventing interest-like stablecoin offerings.  

“This is the best possible result,” that source said, noting the new draft seemed broader than an earlier proposal advanced by Senators Thom Tillis and Angela Alsobrooks, and expressing confidence that “people will still get their rewards.”

Coinbase’s stock, trading under the ticker name COIN, concluded Wednesday’s trading session at $181, down nearly 5% from its opening price above $190 per share. 

Featured image from OpenArt, chart from TradingView.com