Coinbase Rejects New Clarity Act Draft Over Stablecoin Yields

• Coinbase has officially voiced its opposition to the latest draft of the Clarity Act, specifically targeting provisions that restrict stablecoin yields.
• The proposed legislation aims to prevent cryptocurrency exchanges from offering rewards on stablecoin balances to protect traditional banking deposits.
• Financial stakes are high for the exchange, which reported $1.35 billion in stablecoin-related revenue in 2025.

Continued Resistance to Legislative Proposals

Coinbase, the leading cryptocurrency exchange in the United States, has once again declined to support the updated version of the Clarity Act. According to reports from earlier this week, the company informed the Senate that it could not back the current text due to significant concerns regarding stablecoin rewards. This latest version of the bill includes a compromise intended to address the banking sector's fears that stablecoin yields could siphon funds away from traditional financial institutions.

The push against the bill was reportedly triggered by provisions led by Senators Thom Tillis and Angela Alsobrooks. This bipartisan proposal would prohibit crypto exchanges from paying rewards to users holding stablecoin balances. Furthermore, it seeks to limit incentive structures by restricting access to transaction size data, which would make the calculation of such rewards substantially more difficult for platforms.

The Battle Over Stablecoin Yields

The debate centers on the competition between traditional banks and the burgeoning crypto industry. Banks have lobbied heavily against allowing yields on idle stablecoin holdings, arguing that these incentives threaten their deposit base—funds they rely on to provide credit to the broader economy. Conversely, the crypto sector argues that stablecoin rewards offer necessary financial flexibility for consumers and create new revenue streams for a variety of institutions.

Despite multiple closed-door sessions hosted by the White House to bridge the gap between these two industries, a resolution remains elusive. This marks the second time Coinbase has pulled support for the act; CEO Brian Armstrong previously criticized the legislation in January, accusing the banking lobby of attempting to stifle competition.

Financial Impact and Market Response

For Coinbase, the regulatory outcome is tied directly to its bottom line. The exchange reported $1.35 billion in revenue from stablecoins in 2025, much of which comes from its revenue-sharing agreement with Circle regarding USDC. New restrictions on these rewards could potentially dismantle a primary source of income for the company.

Market performance reflects the ongoing uncertainty:

• Coinbase (COIN) shares closed at $181.10 on Wednesday, virtually flat with a 0.03% gain.
• The stock has faced a 7.4% decline over the last five days and a broader 41% drop over the past six months.
• Shares of Circle have also seen sharp declines as analysts point to the legislative stalemate as a major headwind.

While Senator Cynthia Lummis noted that a bipartisan compromise is essential for the act's passage and that work continues to protect rewards, the industry remains on edge regarding the final terms of the bill.