Coinbase Flags Concerns Over CLARITY Bill

TheNewsCryptoPublished on 2026-01-12Last updated on 2026-01-12

Abstract

Coinbase has threatened to withdraw its support for the upcoming CLARITY Act, a key U.S. crypto bill, if it restricts the ability of platforms to offer rewards on stablecoin holdings beyond basic disclosure rules. The exchange argues such limitations would harm its business and competition in the stablecoin market, particularly affecting rewards programs for assets like USD Coin. This stance follows the earlier GENIUS Act, which prohibited issuers from paying yields but allowed third-party platforms to offer rewards. Coinbase claims restricting platform-based rewards would undermine previous compromises and unfairly advantage traditional banks. The issue arises as policymakers work on broader crypto market reforms, with some senators seeking a compromise that would permit rewards only for chartered banks or trust companies.

As per the reports, it is speculated that Coinbase might withdraw its support for Washington’s upcoming major crypto bill. The firm is setting its boundaries as Congress moves closer to finalising its upcoming major crypto bill named the CLARITY Act.

In a report shared by Bloomberg on January 11, a warning surfaced as policymakers got ready to put up an extensive digital-asset market structure bill in the Senate later this week. Coinbase revealed that it may pull out its support for the CLARITY Act if it limits stablecoin rewards beyond fundamental disclosure rules.

As per the exchange, the issue directly hits its business and the competition in the stablecoin market, and the people close to the company’s thinking think alike. The ability to offer rewards on stablecoin balances, mainly USD Coin, remains at stake.

Association with the other Act

The debate trails through the GENIUS Act in July, which made the first federal framework for stablecoin issuers. That law bars creators from paying interest or yield associated only with holding stablecoins, but it does not obstruct third-party platforms from offering rewards to users.

Companies associated with crypto say that distinction was intentional. The officials from Coinbase state that prohibiting platform-based rewards would revoke compromises so far settled in the GENIUS Act and shift the field in favour of banks.

The firm has also mounted rewards as a way to make the role of the dollar in global digital finance more robust, mainly as different countries explore interest-bearing virtual currencies. Political pressure surrounding the bill is also increasing. In the election cycle of 2023-24, the crypto industry was leading in being the largest corporate political spender, in which Coinbase was a prominent donor.

The threat to withdraw support has weight as policymakers attempt to maintain momentum in the back of broader market structure reforms. Still, the final outcome is not clear. Some senators are looking for a middle ground that would permit rewards only for companies holding bank or trust charters.

Highlighted Crypto News Today:

Bitcoin Holds Near $92K as Asia Rises Ahead of US CPI Data

TagsCoinbaseCrypto BillGenius ACT

Related Questions

QWhy might Coinbase withdraw its support for the CLARITY Act?

ACoinbase may withdraw its support if the CLARITY Act limits stablecoin rewards beyond fundamental disclosure rules, as this directly impacts its business and competition in the stablecoin market.

QWhat is the main concern for Coinbase regarding the CLARITY Act?

AThe main concern is the potential restriction on the ability to offer rewards on stablecoin balances, particularly for USD Coin, which is a key part of its business model.

QHow does the GENIUS Act relate to the current debate over the CLARITY Act?

AThe GENIUS Act, passed in July, established the first federal framework for stablecoin issuers. It prohibits issuers from paying interest directly but allows third-party platforms to offer rewards. The current debate centers on whether the CLARITY Act will uphold this distinction.

QWhat is the crypto industry's argument for allowing platform-based stablecoin rewards?

AThe industry argues that prohibiting platform-based rewards would undo compromises made in the GENIUS Act and unfairly shift the competitive landscape in favor of traditional banks.

QWhat is one potential legislative compromise being considered regarding stablecoin rewards?

ASome senators are seeking a middle ground that would permit rewards only for companies that hold a bank or trust charter, attempting to balance innovation with regulatory oversight.

Related Reads

In Conversation with Ray Dalio: We Are Currently in an AI Bubble, with 1% of My Portfolio in Bitcoin

Ray Dalio, founder of Bridgewater Associates, warns in an interview that the current AI boom shows classic bubble characteristics, which could lead to significant economic downturns as seen in past cycles like 1929 or 2000. He explains that speculative enthusiasm, fueled by debt and overvaluation, often precedes a crash when rising rates or taxation force asset sales, causing widespread losses and recession. Dalio also outlines his "Big Cycle" theory, describing an approximate 80-year pattern where widening wealth gaps, massive government deficits, and shifting geopolitical power (like China's rise) create internal conflict and global instability. He emphasizes that we are in a late-cycle, transitional phase where traditional powers like the US and UK face decline. For personal wealth protection, Dalio advises diversification beyond cash into assets like stocks, bonds, real estate, and particularly gold, which he prefers over Bitcoin. While he holds about 1% of his portfolio in Bitcoin as a non-printable hard asset, he views gold as more secure from technological or governmental threats. Regarding AI's impact, Dalio believes it will disproportionately benefit capital owners, worsening inequality by replacing both physical and cognitive labor. He suggests that human intuition and emotional intelligence, combined with AI, will be key for future workers. On taxation, Dalio argues that wealth taxes are impractical and risk triggering asset sell-offs, reducing productive investment. He points to the UK as a cautionary example of debt, low productivity, and political strife. Geopolitically, Dalio foresees a more regionalized world, with the US showing weakness in prolonged conflicts like with Iran, akin to past imperial declines. The ideal outcome, he suggests, is coexisting powerful blocs (e.g., Americas, China-Asia Pacific) without major war.

marsbit3h ago

In Conversation with Ray Dalio: We Are Currently in an AI Bubble, with 1% of My Portfolio in Bitcoin

marsbit3h ago

Daily 7.2 Trillion KRW: Foreign Capital's Record Net Buying on Friday! Wall Street Says Headwinds for Korean Stock Fund Flows Have Subsided

South Korean stock market sees a dramatic shift in fund flows. On July 31, foreign investors made a record net purchase of approximately KRW 7.2 trillion in KOSPI stocks, marking a fundamental reversal from the persistent large-scale net outflows seen in previous months. This contributed to a significant narrowing of foreign net selling in July to KRW 9.8 trillion, down sharply from KRW 48.4 trillion in June and KRW 44.5 trillion in May. Simultaneously, domestic institutional pressure eased. South Korean pension funds and asset managers turned to a net buying position in July, purchasing KRW 1.0 trillion worth of KOSPI shares, contrasting with net sales in May and June. Market volatility is expected to be dampened by new financial regulations. Effective July 31, the Financial Services Commission tightened access for retail investors to single-stock leveraged ETFs by raising the minimum cash deposit requirement. Trading volumes for these products subsequently dropped to about 50% of their monthly average. Citigroup Research maintains its year-end KOSPI target of 10,000 points. The firm cites several supportive factors: the substantial easing of headwinds from capital outflows, a robust fundamental outlook for the semiconductor sector, historically low market valuations, strong economic fundamentals, and the potential for policy support from financial authorities if needed.

marsbit3h ago

Daily 7.2 Trillion KRW: Foreign Capital's Record Net Buying on Friday! Wall Street Says Headwinds for Korean Stock Fund Flows Have Subsided

marsbit3h ago

Breaking! OpenAI's Next-Gen AI Solves 10 Fields Medal-Level Problems

OpenAI's next-generation AI model Astra achieves breakthroughs in 10 long-standing mathematical conjectures. The results, including constructing the first known infinite, finitely presented non-sofic group—resolving a major question since 1999—and advancing the high-dimensional sphere packing problem beyond a 46-year-old barrier, are detailed in a 249-page paper. Key proofs have been formally verified using Lean 4. The AI also refuted a rigidity conjecture by Fields Medalist Alain Connes. According to OpenAI, generating these proofs cost under $2,000. Experts describe the findings as potentially Fields Medal-worthy and a landmark moment for both mathematics and AI, showcasing the model's ability to produce profound, human-like reasoning across diverse fields like group theory, geometry, and operator algebras.

marsbit4h ago

Breaking! OpenAI's Next-Gen AI Solves 10 Fields Medal-Level Problems

marsbit4h ago

How to Make Yourself Irreplaceable by AI Forever

This article argues that the primary threat from AI is not job replacement, but remaining trapped in "wage slavery"—financial dependence on employers. The path to becoming irreplaceable is not resisting AI, but becoming an "unemployable" individual who builds their own meaningful enterprise. The author identifies five key elements for this: Agency (acting without permission), Taste (judging what's worthwhile), Persuasion, Persistence, and Iteration. The solution is to stop being a "pawn" in someone else's game. To start, you must fundamentally change your identity and environment, then engage in rapid, real-world trial and error. While both coding and creating media (content) are powerful, content is more crucial. AI can generate assets, but true value lies in subjective, human-driven content that builds trust and narrative. The actionable advice is to carve out 15 minutes to answer foundational questions: 1) Uncover your "raw material"—what you know deeply or solve effortlessly. 2) Define your contrarian perspective—what common beliefs you think are wrong. The intersection of these answers is your direction. Finally, you must launch by publishing your first core idea immediately, using the feedback to iterate and develop the skills needed for a self-directed life and career.

marsbit5h ago

How to Make Yourself Irreplaceable by AI Forever

marsbit5h ago

Thanks to Dice Rolls, Bitcoin Keys Are Stored Offline, But Not Everyone Will Do It

The article discusses using dice rolls to generate secure Bitcoin wallet seeds, providing entropy independent of potentially flawed hardware random number generators. It explains that each fair dice roll offers about 2.585 bits of entropy, with around 50 rolls needed for a standard 12-word seed phrase and 99+ recommended for higher security. This method gained attention after a vulnerability was revealed in some Coldcard hardware wallets, where a faulty firmware RNG (dating back to 2021) compromised generated keys. The analysis notes that while a dice-generated main seed was safe from this specific flaw, other Coldcard functions (like creating paper wallets, backup keys, or passwords) could still be vulnerable if they used the defective RNG. The piece argues that while dice-based entropy is technically robust, the manual process is error-prone, tedious, and unrealistic for most new users, who might make mistakes in recording or inputting rolls. It concludes that while manual entropy generation should remain an option for advanced users, the long-term goal is to develop reliable, user-friendly hardware and software that securely generates randomness without requiring specialized knowledge. Coldcard users are advised to check their firmware version and replace any secondary secrets (like paper wallet keys) created with vulnerable devices, while also considering multi-signature setups with devices from different manufacturers for added security.

cryptonews.ru8h ago

Thanks to Dice Rolls, Bitcoin Keys Are Stored Offline, But Not Everyone Will Do It

cryptonews.ru8h ago

Trading

Spot
活动图片