Key Highlights
- Coinbase urged the U.S. Treasury to ensure GENIUS Act rules stay true to Congress’s original intent.
- The company wants rules to apply narrowly to actual stablecoin issuers and financial intermediaries, excluding non-financial software or unrelated digital assets.
- Stablecoins could act like cash for tax purposes, while customer rewards shouldn’t be treated as interest, according to Coinbase.
Leading crypto exchange Coinbase has urged the U.S. Department of the Treasury to ensure that its upcoming rules for implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act stay firmly aligned with Congress’s original intent.
In a letter addressed to the Treasury’s Office of General Counsel, the company warned that adding extra requirements beyond what the law specifies could “stifle stablecoin innovation and adoption” and slow the U.S.’s global competitiveness in digital assets.
The GENIUS Act, signed into law in July 2025, establishes a federal framework for stablecoins, requiring issuers to maintain 1:1 reserves, undergo regular audits, and meet consumer protection and oversight standards.
Faryar Shirzad, Coinbase’s Chief Policy Officer, said, “The implementing regs must stick to the clear intent of the bill text and must ensure that US-issued stablecoins have the versatility and competitiveness needed to become the world’s dominant payment and settlement instrument.”
The company urged the Treasury to narrowly interpret key definitions in the law, such as “payment stablecoin” and “digital asset service provider,” to focus only on financial intermediaries that actually issue or handle stablecoins. Coinbase cautioned against bringing non-financial or open-source developers under regulatory oversight.
Narrow rules for stablecoins
Coinbase has urged regulators to take a narrow approach when interpreting the law. “Non-financial software, blockchain infrastructure, and digital assets that are not designed or marketed as a GENIUS-compliant payment stablecoin are clearly outside of the scope of the statute’s plain language,” Coinbase wrote.
The exchange also clarified that the law’s ban on paying interest applies only to stablecoin issuers, not to exchanges or intermediaries that offer customer rewards. Coinbase argued that treating rewards or loyalty programs as “interest” would go against what Congress intended.
Tax and accounting treatment
On the financial side, Coinbase called for payment stablecoins to be treated as cash equivalents for both tax and accounting purposes, noting that they function much like traditional money. “Payment stablecoins are a financial technology that by design and function replicate the stability and utility of fiat currency. Their tax treatment should reflect this reality,” the letter stated.
The company said the Treasury and the IRS should take a “pragmatic, low-burden approach” to tax issues, saying stablecoin transactions shouldn’t count as capital gains because their value stays stable. Coinbase also warned that treating them like other digital assets could overwhelm the IRS with unnecessary data and slow down everyday use.
A call for clarity and coordination
Finally, Coinbase asked the Treasury to clearly explain penalties and work with other regulators to avoid conflicting rules, saying clear and consistent guidance is key for U.S. stablecoins to compete globally.
“Congress carefully drafted GENIUS with these goals in mind, and it is the role of implementing agencies to promulgate regulations consistent with these objectives so that Americans can benefit from stablecoins at scale,” Coinbase concluded.
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