- Coinbase to reconsider its stance regarding the Clarity Act.
- Restriction on Stablecoin rewards could stall innovation, competition and user choice.
- The U.S. Senate Banking Committee has moved forward with bipartisan efforts on the Clarity Act.
Coinbase Global Inc. (NASDAQ: COIN) may reconsider its support for the Clarity Act. As the Senate committee prepares for the January 15 markup, Bloomberg reported over the weekend that Coinbase does not support a broad restriction or ban on stablecoin rewards as stipulated under the Genius Act.
Coinbase Voices Concerns Over Clarity Act
The top-tier cryptocurrency exchange has voiced concerns about potential restrictions or a ban on stablecoin rewards. Instead, Coinbase wants the Clarity Act to stick with the enhanced disclosure and transparency requirements.
The crypto exchange has been responding to pressure from banking groups through the American Bankers Association (ABA). The ABA has argued that the stablecoin rewards have threatened to siphon deposits from Federal Deposit Insurance Corporation (FDIC)-insured accounts.
The ABA has argued that stablecoin rewards may potentially harm community lending to small businesses. However, Coinbase has argued that such restrictions would catalyze growth for foreign stablecoins and digital assets, especially as China explores the stablecoin market.
“Congress cannot bow to the big banks and cut out the rewards structure built into the GENIUS Act. Rewards expand choice and competition. Walking that decision back would reduce options for consumers and benefit foreign issuers and state-backed digital currencies,” David Mclntosh, cofounder at Federalist Society, stated.
Why Now?
Coinbase has heavily benefited from sharing stablecoin rewards with users in the past. The crypto exchange has partnered with major stablecoin issuers such as Circle Internet, thus a potential ban is unwelcomed by the Coinbase shareholders.
Notably, Coinbase has made several donations to the Fairshake super PAC, amounting to over $45 million. The crypto exchange has promised to add more funding to the PAC ahead of the 2026 midterm elections.
Senate Moves Forward with Digital Asset Market Structure Bill
Coinbase’s concerns about certain clauses in the Clarity Act have come ahead of the expected January 15, Senate markup. The U.S. Senate Banking Committee has worked closely with President Donald Trump, whereby David Sachs, the White House crypto czar, promised bipartisan support on the Clarity Act.
What’s the Expected Market Impact?
According to Cardano founder Charles Hoskinson, the crypto market will experience a bull rally if the Senate passes the Clarity Act before the end of Q1. However, Hoskinson stated that the Clarity Act ought to have passed last year, and thus said that Sachs ought to resign.
Furthermore, he noted that the crypto market has dropped around 50% since President Donald Trump took office. As such, Hoskinson urged the crypto industry to decouple its dependence from the United States.
If the U.S. Senate passes an amended Clarity Act, further delay could arise, as its approval in the House would need more time. The bipartisan delays on the Clarity Act could further complicate the timing as Coinbase threatens to pull its support for certain clauses.
Related: US Crypto Rules: Implementation Could Stretch to 2029, TD Cowen Says
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