Key Takeaways
- Coinbase and PayPal are still offering stablecoin rewards despite new restrictions.
- The GENIUS Act bans issuers from paying interest but doesn’t restrict third parties.
- Both companies say their rewards are legal “revenue sharing,” not interest — and they’re not backing down.
Just weeks after the U.S. passed the GENIUS Act, banning interest payments on stablecoins, two of crypto’s biggest names — Coinbase and PayPal — have found a way to keep rewarding users.
Coinbase Argues Rewards Come From Revenue Sharing
The GENIUS Act, signed into law by President Donald Trump, prevents stablecoin issuers from offering any form of yield.
However, it leaves the door open for third-party platforms, like exchanges and payment services, to reward users under the label of “revenue sharing.”
And that’s exactly the play Coinbase and PayPal are making.
Both companies offer stablecoins yields — around 4% APY on USDC through Coinbase, and 3.7% on PYUSD via PayPal.
However, since Coinbase doesn’t issue USDC, Circle does, the exchange argues the GENIUS Act doesn’t apply to them.
“In the GENIUS Act, the issuer of stablecoins is prohibited from paying interest and yield,” Coinbase CEO Brian Armstrong said in the company’s latest earnings call.
“First, we are not the issuer. And second, we don’t pay interest — we pay rewards,” he added.
PayPal Uses a Similar Strategy With PYUSD
The same logic applies to PayPal. While its stablecoin PYUSD carries the company’s name, it’s actually issued by Paxos, a separate crypto firm.
That technical detail gives PayPal the same legal wiggle room to continue offering yield.
PayPal CEO James Alexander Chriss said the rewards program is one of their most compelling offerings for attracting new users — and that they have no intention of pausing it.
What’s Next? More Loophole Polishing — or a Legal Update?
This workaround could eventually force lawmakers to revise the GENIUS Act.
For now, though, neither Coinbase nor PayPal is violating the letter of the law — just skirting the spirit of it.
Until regulators tighten the rules or close the third-party loophole, stablecoin rewards are here to stay, at least on the big platforms that know how to play the game.
