Coinbase Pushes Back on Stablecoin Clarity Act as Crypto Industry Splits

Coinbase is quietly expressing dissatisfaction with the latest stablecoin compromise in the GENIUS Act negotiations, signaling tension without making its opposition fully public. Sources familiar with the situation say the exchange giant has raised concerns with Senate staffers about the revised legislative framework, which was shared with crypto stakeholders on Monday and banking representatives on Tuesday.

Reactions from the crypto side were decidedly mixed. While some industry players were pleasantly surprised by the updated proposal, Coinbase emerged as the most vocal critic. Attendees were not allowed to keep copies of the text, which has yet to be publicly released.

At the heart of the friction is language that could restrict how stablecoin-related rewards programs operate. Critics worry the proposal gives regulators too much subjective discretion in overseeing permissible activities — particularly around whether firms can tie rewards to the volume of stablecoin transactions in a user's account. Such restrictions could block the development of credit card-style rewards programs built on stablecoins.

Coinbase CEO Brian Armstrong has been a dominant voice throughout months of negotiation. His resistance to an earlier stablecoin yield compromise previously derailed a planned Senate hearing, and his company arguably stands to lose the most if stablecoin rewards programs are scaled back.

An industry call this week reportedly exposed a growing divide. Some companies are willing to accept limits on stablecoin rewards to preserve the Clarity Act's broader goal of formally integrating crypto into the U.S. financial system, while others, including Coinbase, appear less willing to make that trade.

Markets responded sharply to the news. Circle's stock dropped roughly 20% on Tuesday, with Tether's announcement of a voluntary audit adding further pressure. Coinbase shares also dipped.

White House crypto adviser Patrick Witt pushed back against pessimism, posting on X that concerns were "uninformed" and the situation would resolve positively. Industry insiders, meanwhile, are urging patience and less social media commentary.