According to Coindesk, Coinbase is pressuring lawmakers to retain its stablecoin reward program, warning that it may withdraw its support for the Clarity for the Cryptocurrency Markets Act (CLARITY Act) otherwise. The banking industry opposes the reward program, arguing that it could draw deposits away from the traditional financial system and harm lending operations. Faryar Shirzad, Coinbase's chief policy officer, stated that research from Cornell University shows stablecoin adoption does not reduce bank lending, and that the reward program is a necessary means to compete with bank fees. Some lawmakers are considering a compromise that would allow only institutions with banking licenses to offer such rewards. Currently, Coinbase provides a 3.5% reward to users holding USDC through its Coinbase One subscription service.
Coinbase Urges Lawmakers to Maintain Stablecoin Rewards Despite Banking Sector Opposition
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Summary
Coinbase is urging lawmakers to maintain stablecoin rewards, linking the issue to broader discussions on stablecoin regulation. The company warned that it may withdraw its support for the CLARITY Act if these rewards are prohibited. Banks argue that the program diverts funds away from traditional lending. Coinbase's Faryar Shirzad cited research from Cornell University showing no negative impact on bank loans. Some lawmakers are considering a proposal to restrict rewards to licensed institutions. The exchange currently offers a 3.5% return on USDC through its Coinbase One service. The CFT (Countering the Financing of Terrorism) agenda is part of the ongoing regulatory balancing act.
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