Coinbase (NASDAQ:COIN) has signaled it might pull its backing from a key market structure bill if the legislation goes beyond requiring better transparency and instead curbs rewards for stablecoin users. This development, highlighted in a recent Bloomberg update, underscores growing tensions in Washington‘s push for clearer crypto oversight.
As lawmakers gear up to introduce the bill on Monday, with reviews planned in two Senate committees by Thursday, Coinbase is reportedly ramping up its advocacy campaigns.
Insiders shared with Bloomberg that the company sees any expansive curbs on rewards as a deal-breaker, given how integral these incentives are to its operations. Stablecoins, digital assets pegged to traditional currencies like the dollar, form a cornerstone of Coinbase’s revenue strategy.
This comes against the backdrop of the GENIUS Act, enacted in July 2025, which bars stablecoin creators—such as Circle, issuer of USDC—from directly compensating holders with interest or yields.
However, the law leaves room for external platforms like Coinbase to distribute rewards tied to user holdings.
Discussions around the new bill include proposals to confine such perks to only licensed financial entities, a move that could sideline many crypto players.
Coinbase, which has sought a national trust charter to bolster its regulatory standing, is pushing back alongside other industry participants.
They argue that allowing platforms to offer rewards promotes healthy rivalry in the sector.
The exchange collaborates closely with Circle, splitting some earnings from the reserves supporting USDC, and provides attractive incentives, including a 3.5% return on balances for Coinbase One subscribers.
Additionally, Coinbase owns a minority interest in Circle. Analysts project that stablecoin activities could generate $1.3 billion for the company in 2025, making any new constraints a severe setback.
Faryar Shirzad, Coinbase’s top policy executive, has warned that restricting these rewards might hand advantages to international competitors.
He pointed to China’s strategy of offering yields on its digital yuan as an example of how such policies could accelerate global adoption elsewhere, potentially leaving the U.S. behind in the digital finance arena.
On the flip side, traditional banking associations are advocating for stricter controls.
They contend that stablecoin rewards resembling interest could siphon funds away from conventional banks, reducing resources available for loans to small enterprises, agricultural operations, students, and aspiring homeowners.
Critics also highlight that crypto services often miss the protective measures, like FDIC insurance, that safeguard bank deposits.
This clash is testing the fragile cross-party consensus on the market structure bill, designed to delineate responsibilities between regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Coinbase’s position holds particular sway, as the firm ranks among the top contributors to President Donald Trump‘s campaigns, both during and post-election.
The Trump White House has made accelerating crypto rules a priority since the GENIUS Act‘s passage, aiming to foster innovation while addressing risks.
Yet, ongoing friction over stablecoin incentives risks stalling progress or derailing the bill entirely, delaying much-needed clarity for the burgeoning industry.
