Coinbase May Rethink Backing Crypto Bill, Bloomberg Reports

Coinbase signals possible withdrawal of support for a U.S. crypto bill as stablecoin reward limits raise revenue and policy concerns.

Coinbase has warned lawmakers it may reconsider backing a major U.S. crypto bill. The concern centers on stablecoin rewards. According to Bloomberg, the exchange considers further restrictions to be detrimental. As a result, lobbying efforts have increased as Congress prepares to roll out the legislation.

Stablecoin Rewards Become Central Policy Flashpoint

Meanwhile, stablecoin incentives are essential to Coinbase’s business model, which still faces pressure to earn profit and maintain its position. The exchange receives the interest from the reserves that back Circle’s USDC in common. Therefore, rewards encourage users to hold balances on Coinbase. During times of downturn in the market, this income gives stability and a predictable cash flow.

Related Reading: Coinbase to Pause USDC-Peso Trading in Argentina Starting January 2026 | Live Bitcoin News

However, the GENIUS Act is a restriction on the issuers already signed in July 2025. Under the law, stablecoin issuers cannot distribute direct interest. Circle, for example, must conform totally. Nevertheless, the framework enables third-party platforms to provide rewards on their own.

Currently, Coinbase pays up to 3.5% rewards on USDC balances. This incentive funds user retention and liquidity. According to Bloomberg data, the stablecoin revenue of Coinbase reached $1.3 billion in 2025. Therefore, the proposed limits are material financial risk.

Meanwhile, lawmakers are planning to release the market structure bill on Monday. Senate committee markups are set for Thursday. Sources informed Bloomberg that Coinbase is against restrictions beyond increased disclosures. Any wider limits are still unacceptable to the exchange.

Traditional banks are in favour of tighter limits. They believe stablecoin rewards take deposits away from banks. As a result of this, banks feel competitive pressure increase. This opposition adds to the policy divide around digital assets.

In response, Coinbase has stepped up its lobbying efforts. The crypto industry shelled out in the 2023 – 2024 election cycle. Coinbase donated $1 million for Donald Trump’s inauguration. It was also used to fund a proposed White House ballroom.

Revenue Risks Could Reshape Coinbase Strategy

Current updates indicate that Coinbase might pull support for the public if limitations progress. Such a move carries political weight, analysts say. The company is still one of the most influential crypto advocates in Washington. Therefore, its position may transform legislative momentum.

Stablecoin rewards are one of the pillars of revenue. Coinbase and Circle have an interest in the USDC reserves. Coinbase is also a minority stakeholder in Circle. Thus, restrictions may hit multiple revenue channels at the same time.

If there are no incentives, fewer users may hold stablecoins on Coinbase. As a result, exchange liquidity and engagement might fall. Risk of revenue contraction grows under tighter rules, Bloomberg estimates

Despite the concerns, Coinbase recently won some legal battles. In February of 2025, the SEC abandoned its major lawsuit. This result had the effect of reinforcing Coinbase’s position regarding regulation. Therefore, the company gets into negotiations with the upper hand.

Furthermore, greater market clarity is still the goal of the bill. Lawmakers want standardized rules for all digital assets. Coinbase supports clarity but balks at revenue-threatening provisions. This tension characterizes current negotiations.

Overall, the dispute illustrates the increasing political significance of stablecoins. As crypto integrates further into the financial sphere, incentives are put to the test. Coinbase’s response could determine the outcome of US crypto policy in 2026.

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