Coinbase is pressuring U.S. lawmakers as Congress prepares to release a major crypto market-structure bill on Jan. 12.
Banking Lobby vs. Crypto Firms
Coinbase is ramping up pressure on U.S. lawmakers as Congress prepares to unveil a sweeping crypto market-structure bill. At issue: whether exchanges like Coinbase can continue offering rewards to customers who hold stablecoins. The crypto exchange has signaled it may withdraw support for the legislation if restrictions go beyond disclosure requirements, according to people familiar with the company’s stance.
According to a Bloomberg report, the bill is scheduled for release on Jan. 12, with Senate committee markup expected later in the week. One proposal under discussion would limit stablecoin rewards to regulated financial institutions — a move backed by banks that argue yield-bearing accounts could drain deposits from traditional lenders. Coinbase, which has applied for a national trust charter, could eventually qualify under such rules.
Read more:US Crypto Framework Advances as Senate Banking Schedules Market Structure Markup
Although the draft law has been hailed, crypto-native firms warn that broader restrictions would choke competition and innovation. Coinbase CEO Brian Armstrong has previously predicted that banks opposing stablecoin yield today will eventually lobby for it.
Stablecoin rewards are a critical revenue stream. Coinbase shares interest income from reserves backing Circle Internet Group’s USDC, and offers customers 3.5% rewards on Coinbase One balances. Bloomberg data estimates Coinbase’s stablecoin revenue at $1.3 billion in 2025. A ban could sharply reduce holdings on the platform and dent revenues.
Coinbase also owns a minority stake in Circle, the largest U.S.-compliant stablecoin issuer under the GENIUS Act, signed last year. The GENIUS Act bars issuers from paying interest directly but allows distribution partners like Coinbase to offer rewards. Banks argue this loophole threatens community lending, while crypto firms say rolling back rewards would undermine U.S. competitiveness — especially as China begins paying interest on its digital yuan.
The dispute has reportedly eroded bipartisan support for the bill, raising doubts about passage this year. Bloomberg Intelligence analyst Nathan Dean puts the odds of approval in the first half of 2026 below 70%.
Lawmakers are weighing a middle path: allowing firms with trust charters to offer yield. Five crypto companies have recently received conditional approvals, though the banking lobby insists such charters stretch regulatory intent and pose systemic risks.
Industry insiders say restrictions would only spark new reward models. “Applications will find some way to give you credit for holding stablecoins,” Stripe executive William Gaybrick said last year.
With the administration pushing for swift legislation, senators face mounting pressure to resolve the stablecoin rewards fight. Coinbase’s threat to pull support underscores the stakes: billions in revenue, the future of stablecoin adoption, and the balance of power between banks and crypto platforms.
FAQ ❓
- What is happening in Washington? Congress is set to unveil a crypto market-structure bill on Jan. 12.
- Why does it matter for Coinbase? The bill could restrict stablecoin rewards, a $1.3B revenue stream for the exchange.
- What’s the banking industry’s stance? Banks want rewards limited to licensed institutions, warning of deposit flight from community lenders.
- How could this impact global competition?Crypto firms argue bans weaken U.S. leadership as China moves to pay interest on its digital yuan.