Coinbase is signaling it could pull its support for the CLARITY Act if lawmakers add a stablecoin-rewards ban that goes beyond disclosure requirements. The company’s position is that an outright prohibition would materially weaken reward-based stablecoin products that drive usage and retention.
The dispute is coming to a head ahead of a Senate markup scheduled for January 15, 2026, after banks pushed to broaden restrictions associated with the GENIUS Act. Coinbase has publicly cited an internal estimate that as much as $1.3 billion in USDC-related revenue could be at risk under a wider ban.
Why stablecoin rewards matter to Coinbase’s product strategy
Coinbase frames stablecoin rewards as a core lever for onboarding and retention, not a marginal perk. In Coinbase’s view, promotional yields are embedded in acquisition messaging and shape how users fund and hold balances inside wallet and “earn” flows.
If stablecoin rewards are constrained, Coinbase argues teams would need to rethink the mechanics that currently reduce drop-off. That redesign would touch conversion funnels, confirmation modals, and how “yield” permissions and recurring distributions are explained inside the product.
What a broader ban could change in practice
From a UX and implementation standpoint, the immediate change would be higher friction at the moment of commitment. Replacing reward-driven flows with heavier disclosures and tighter permission transparency would add steps per operation and increase average time-to-complete for on-chain actions.
Coinbase’s leadership has framed the issue as a line it won’t cross, with CEO Brian Armstrong calling any reopening or expansion of the GENIUS Act framework a “red line.” Banks counter that stablecoin rewards could pull funds away from bank deposits and create an uneven competitive dynamic versus insured deposit products.
Coinbase is advocating for disclosure-first rules rather than prohibitions, arguing that transparency can address consumer-protection goals while preserving user choice. The policy trade-off, as Coinbase frames it, is between a streamlined yield-led onboarding experience and a more restrictive regime that prioritizes systemic-risk concerns but increases user friction.
With the January 15, 2026 Senate markup approaching, stakeholders are focused on whether the final language preserves rewards with disclosures or moves toward a broader ban. That outcome will directly drive product rework, experimentation velocity, and the economics of deposit-and-earn retention strategies across major platforms.
