Coinbase Chief Legal Officer Paul Grewal has told lawmakers they cannot back the CLARITY Act while opposing crypto rewards. His public intervention comes as Senate stablecoin yield negotiations enter a critical stretch.
The pushback arrived in a public post on X. Grewal framed the debate as a binary choice for legislators weighing the Tillis-Alsobrooks yield compromise.
Banks and Crypto Clash Over Stablecoin Yield
The Senate draft from Thom Tillis and Angela Alsobrooks would ban passive yield on stablecoin balances. It would permit only narrow activity-based rewards tied to payments, transfers, or platform use. Banking groups have lobbied for an even tighter restriction. They argue that rewards on idle balances could trigger deposit flight from traditional banks.
Grewal has dismissed the deposit flight argument for months, calling it a theoretical claim unsupported by data. A recent White House Council of Economic Advisers report backed him up. It found that banning stablecoin yield would increase bank lending by just 0.02%.
Stablecoin-related revenue made up roughly 19% of Coinbase’s 2025 revenue, according to Bloomberg Intelligence. The final text is financially material for the exchange and its largest rivals.
The Legislative Clock Is Running Out
Senator Cynthia Lummis has warned that the bill could slip to 2030 if it misses the midterm window. The Senate Banking Committee pulled it from the April 20 schedule. That decision has reinforced fears that the window is closing fast.
Grewal’s latest intervention sharpens the political calculus for undecided senators. The current compromise forces a choice between the banking lobby and a crypto sector that views activity-based rewards as a hard floor.
Whether that floor survives committee markup will decide if the CLARITY Act clears the Senate in 2026.
The post Coinbase CLO Tells Lawmakers to Back Crypto Rewards or Abandon CLARITY Act appeared first on BeInCrypto.
Source: https://beincrypto.com/coinbase-grewal-clarity-act-warning-crypto-rewards/