Coinbase Chief Policy Officer Faryar Shirzad said on Aug. 26 that the American Bankers Association’s concerns over stablecoin rewards are not backed by available evidence. In a written response, Shirzad challenged the claim that reward-bearing stablecoin platforms would pull deposits away from community banks and weaken local credit creation. She said current law already permits such rewards and noted that Coinbase has been paying rewards to USDC users for more than four years.
Shirzad cited data showing that community bank deposits rose 26% from June 2019 to March 2026, an increase of about $482 billion. She also referred to research from Charles River Associates and the Council of Economic Advisers, saying those studies likewise did not find a significant relationship between stablecoins and bank deposits.
She added that the ABA’s requested changes are not about technical details in the CLARITY Act. Under the current text, users cannot receive returns simply for idle balances, but rewards tied to genuine activity are allowed. Shirzad argued that the ABA’s proposed edits could broaden restrictions to ordinary stablecoin use cases and leave questions such as whether merchant cashback counts as bank interest to regulators and litigation. She called for preserving the current compromise and passing the CLARITY Act.
Coinbase Chief Policy Officer Faryar Shirzad on Aug. 26 published a rebuttal to the American Bankers Association’s concerns over stablecoin rewards, saying the available data do not support the group’s position.
Coinbase says stablecoin rewards have not driven deposit flight
Shirzad said the ABA argues that rewards paid by stablecoin platforms would cause deposit outflows from community banks and weaken local lending. She said there is no evidence showing that outcome. Current law already allows this type of reward, she wrote, and Coinbase has paid rewards to USDC users for more than four years.
She cited figures showing that community bank deposits grew 26% from June 2019 to March 2026, an increase of about $482 billion. Shirzad also pointed to research from Charles River Associates and the Council of Economic Advisers, saying those studies likewise found no significant relationship between stablecoins and bank deposits.
Debate centers on proposed changes tied to the CLARITY Act
Shirzad said the ABA is not seeking to revise technical details in the CLARITY Act. Under the current text, users are barred from receiving returns solely for holding idle funds, while rewards tied to genuine activity remain permitted.
She argued that the ABA’s proposed changes could extend those limits into ordinary stablecoin use cases. They could also leave questions such as whether merchant cashback should be treated as bank interest to regulators and the courts.
Shirzad calls for preserving the current compromise
Shirzad urged lawmakers to keep the existing compromise and pass the CLARITY Act. She said the bill would grant banks new authority in custody, staking, lending, payments, clearing, and market making.
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