Coinbase International Inc. is placing lawmakers on discover that it would stroll away from a key digital asset invoice if new restrictions threaten its means to pay prospects who maintain stablecoins on its platform.
The nation’s greatest cryptocurrency trade may reverse its backing for legislation aimed toward creating guidelines for the crypto market, which lawmakers plan to launch Monday and evaluate in Senate committee proceedings Thursday, a supply shut to the corporate advised Bloomberg. The trade needs any provisions about buyer rewards restricted to requiring extra transparency, quite than outright bans or main limitations.
Some proposals being mentioned would solely let licensed monetary establishments supply such rewards, in accordance to individuals working within the trade. Conventional banks support this method, saying accounts that pay returns on stablecoins would pull cash out of normal banks.
Coinbase has requested regulators for a nationwide belief constitution that may finally qualify it to present rewards underneath these tighter guidelines. Nevertheless, crypto corporations need to preserve providing platform rewards while not having such approval, warning that stronger limits may damage honest competitors.
The potential of Coinbase pulling its support carries weight
Crypto corporations spent extra money on the 2023-2024 election than another trade sector, pouring huge quantities into campaigns for their most well-liked politicians. Coinbase, run by co-founder and chief govt Brian Armstrong, gave $1 million to Donald Trump’s swearing-in ceremony and helps fund the president’s deliberate White Home ballroom.
These rewards matter significantly to Coinbase’s backside line. The corporate and Circle Web Group Inc. break up a number of the curiosity earned from cash backing Circle’s USDC stablecoin. USDC sitting in Coinbase accounts creates a dependable revenue that turns into particularly essential when crypto costs drop. Coinbase additionally holds a minority possession in Circle, which is now the highest stablecoin firm following guidelines set by federal regulation handed in July.
The trade will get prospects to preserve USDC on its platform by giving 3.5% rewards on Coinbase One account holdings. If the brand new invoice blocks this perk, fewer customers would possibly retailer stablecoins there, probably slicing into Coinbase’s complete stablecoin earnings, which Bloomberg figures present may have hit $1.3 billion in 2025.
The ultimate influence relies on precisely how lawmakers write the invoice. However individuals concerned within the talks say some language about rewards will certainly seem within the legislation.
Trump’s second time period introduced fast victories for digital cash corporations, together with the primary nationwide guidelines for stablecoin issuers by the GENIUS Act in July. After Trump signed it, shops and conventional finance corporations rushed to announce stablecoin plans. The Trump household even launched its personal stablecoin referred to as USD1 by World Liberty Monetary earlier than the regulation took impact.
Whereas the administration needs extra payments handed rapidly, the rewards query has broken the bipartisan settlement available on the market invoice. Coinbase’s warning about presumably withdrawing support exhibits rising friction that may delay the legislation, probably killing any probability of passage this 12 months. With out support from each events throughout markup, Bloomberg Intelligence analyst Nathan Dean estimates the percentages of one thing passing within the first six months drop under 70%.
What the GENIUS Act already settled
The GENIUS Act stops stablecoin issuers from paying curiosity or returns simply for holding tokens, nevertheless it permits third-party companions like Coinbase to supply rewards based mostly on buyer balances.
Banks have criticized exchanges paying stablecoin rewards, arguing this threatens to drain cash from banking and weaken native lending.
“If billions are displaced from neighborhood financial institution lending, small companies, farmers, college students, and residential patrons in cities like ours will endure,” the American Bankers Affiliation wrote just lately. “Crypto exchanges and the constellation of stablecoin-affiliated corporations will not be designed to fill the lending hole, nor will they have the option to supply FDIC-insured merchandise, a degree they omit from their aggressive promoting.”
The Senate Banking Committee marks up the Market Construction invoice subsequent week, and stablecoin rewards stay underneath debate. Congress already settled this in GENIUS—reopening it now solely creates uncertainty and dangers the way forward for the US Greenback as commerce strikes onchain. Right here’s why…
— Faryar Shirzad 🛡️ (@faryarshirzad) January 7, 2026
Crypto corporations counter that banks are trying to reverse what the GENIUS Act already settled. Faryar Shirzad, Coinbase’s chief coverage officer, wrote on X that retaining stablecoin rewards helps preserve greenback dominance, declaring that China just lately stated it might pay curiosity on its digital yuan.
Lawmakers face a tough selection
This places senators in a troublesome spot, pressured by the administration to move legislation whereas going through a difficulty the place the center floor appears exhausting to discover.
One compromise would possibly limit rewards to entities with banking licenses or monetary charters, sources stated. 5 crypto corporations just lately bought preliminary approval from the Workplace of the Comptroller of the Forex to grow to be nationwide belief banks, although banking groups fought these approvals hard, claiming crypto companies are stretching the constitution’s goal and will threaten monetary stability.
Even with restrictions, some trade insiders assume crypto companies would simply discover new methods round them.
“There’s no world wherein we gained’t have the option to reward customers for taking actions inside functions,” William Gaybrick, president of know-how and enterprise at Stripe, stated final 12 months. “In a world the place you’re holding stablecoins inside an app, that software will discover a way to provide you with credit score for doing so.”
