Coinbase intensifies pressure on the US Congress, with stablecoin reward terms becoming a key point of contention in crypto legislation.
PANews reported on January 12th, citing Bloomberg, that Coinbase is increasing pressure on US lawmakers to retain the ability to reward customers holding stablecoins. The company believes this business would be at risk if the restrictions under discussion are included in the major cryptocurrency bill announced on Monday. Sources familiar with the matter said that if the bill includes anything beyond strengthening rewards disclosure requirements, Coinbase may reconsider its support for the Digital Asset Market Structure Act, which will be considered by at least one Senate committee on Thursday. Industry insiders revealed that the proposed solution is to restrict the ability to offer rewards to regulated financial institutions, a move supported by some in the banking industry who believe that yield-bearing stablecoin accounts would siphon off traditional bank deposits. Coinbase has applied for a national trust license, hoping to use this to offer rewards under the rules. However, the cryptocurrency-native company is pushing to retain its platform-based rewards model, even without a trust license, and warns that broader restrictions would disrupt the competitive landscape of the industry.
The specific wording of the bill is still unclear, but it will add some provisions regarding rewards, an issue that has weakened bipartisan support for the market structure bill and could delay its passage. Sources indicate a potential compromise is to allow only licensed financial institutions to offer rewards for stablecoin balances. Recently, five crypto companies received conditional approval from the U.S. OCC to become national trust banks. Given these recent approvals, a market structure bill allowing licensed trust companies to offer rewards might appease some crypto companies. If restrictions are implemented, industry insiders believe it will trigger a "whack-a-mole" game, with crypto companies seeking alternative ways to reward users.
You May Also Like
Is Doge Losing Steam As Traders Choose Pepeto For The Best Crypto Investment?
Markets await Fed’s first 2025 cut, experts bet “this bull market is not even close to over”
