Coinbase (COIN) Stock: Threatens to Withdraw Support from CLARITY Act Over Stablecoin Rewards

TLDR

• Coinbase warns limits on stablecoin rewards could block CLARITY Act backing.
• Stablecoin incentives drive $1.3B revenue, key to Coinbase’s user engagement
• Lawmakers debate restricting rewards to banks, splitting crypto and banking groups.
• CLARITY Act may slow as Congress weighs innovation versus financial safeguards.
• Coinbase’s stake in Circle ties its profit to USDC yields and stablecoin rules

Coinbase may withdraw backing for the CLARITY Act if the bill restricts stablecoin rewards beyond disclosure rules. The exchange considers rewards a key business driver and revenue source. Lawmakers plan to mark up the CLARITY Act in the Senate later this week.

The CLARITY Act aims to establish a comprehensive framework for digital assets in the United States. Stablecoin regulations, particularly around USDC, have become a critical part of the legislation. Coinbase’s stance signals a potential rift in support for the CLARITY Act.

Industry insiders say the CLARITY Act could face delays if Congress debates the limits on rewards. The outcome will determine how platforms like Coinbase can structure incentives. Banks and crypto firms remain divided over the provisions in the CLARITY Act.

Stablecoin Rewards Drive Coinbase Revenue

Coinbase generates revenue by offering rewards on stablecoins, primarily USDC, which is backed by cash and short-term Treasuries. These rewards encourage users to maintain balances on the platform. Analysts estimate Coinbase earned over $1.3 billion from stablecoin-related activities in 2025.

The CLARITY Act could alter Coinbase’s ability to offer platform-based incentives. Some proposals would allow rewards only for chartered banks or trust institutions. Coinbase’s minority stake in Circle further ties the company’s financial interests to the yields of stablecoins.

If rewards are limited, user engagement may decline, reducing revenue from USDC holdings. Stablecoin incentives provide a steady income, especially during low trading periods. Coinbase argues these rewards support competition and innovation in digital finance.

Political and Regulatory Stakes

The CLARITY Act follows the GENIUS Act, which created the first federal framework for stablecoins. That law barred issuers from paying interest directly but allowed third-party platforms to offer rewards. Coinbase asserts that limiting rewards would undermine compromises established under the GENIUS Act.

Senators are considering middle-ground proposals that restrict rewards to banks with regulatory charters. Some crypto companies already received conditional approvals for national trust bank status. Banking groups support tighter rules, arguing that yield-bearing stablecoins could divert deposits from traditional institutions.

The CLARITY Act represents a major step in defining U.S. digital-asset policy. Coinbase’s potential withdrawal may influence bipartisan support and slow the bill’s progress. Lawmakers must balance innovation, user protection, and banking system stability as the CLARITY Act moves forward.

The post Coinbase (COIN) Stock: Threatens to Withdraw Support from CLARITY Act Over Stablecoin Rewards appeared first on CoinCentral.