Coinbase is drawing a hard line in Washington. According to a Bloomberg report on Jan. 11, as the Senate prepares to markup the CLARITY Act, a sweeping digital-asset market structure bill, the exchange has warned lawmakers: it will withdraw support if the bill restricts stablecoin rewards beyond basic disclosure rules.
Stablecoin rewards become a fault line
People familiar with the company's thinking say Coinbase views stablecoin rewards as central to its business and competition. The exchange offers rewards on stablecoin balances, particularly USD Coin (USDC), sharing interest income from reserves backing Circle's USDC. Some Coinbase One customers receive roughly 3.5% annual rewards, incentivizing users to keep stablecoins on the platform and providing steady revenue during weak trading cycles. Bloomberg estimates Coinbase's stablecoin-related revenue may have reached about $1.3 billion in 2025. Limiting rewards could reduce USDC holdings on the platform, putting that income at risk. Coinbase also holds a minority stake in Circle, deepening its exposure to the stablecoin economy.
Some proposals in Washington would restrict stablecoin rewards to regulated banks or trust-chartered institutions. The banking lobby argues that yield-bearing stablecoin accounts could pull deposits from the traditional banking system, reducing lending to households and small businesses.
GENIUS Act sets the backdrop
The debate follows the passage of the GENIUS Act in July, which created the first federal framework for stablecoin issuers. That law bans issuers from paying interest tied solely to holding stablecoins but does not block third-party platforms from offering rewards. Crypto firms say that distinction was deliberate. Coinbase executives argue that banning platform-based rewards would undo compromises in the GENIUS Act and tilt the field in favor of banks.
Coinbase also frames rewards as a way to strengthen the dollar's role in global digital finance, especially as other countries explore interest-bearing digital currencies. Political pressure is mounting. The crypto industry was one of the largest corporate political spenders in the 2023–2024 election cycle, and Coinbase has been a visible donor. Its threat carries weight as lawmakers try to maintain momentum for broader market structure reforms.
The final outcome remains uncertain. Some senators consider a middle ground: allow rewards only for firms holding bank or trust charters. Several crypto companies have received conditional approvals for national trust bank status, though those approvals face opposition from banking groups. For now, stablecoin rewards have become a flashpoint that could slow or derail the legislation entirely. Analysts warn that if bipartisan support erodes further, the odds of passing the bill this year could drop sharply.