Coinbase may drop support for CLARITY Act over rewards ban

Coinbase is reportedly pressuring US lawmakers to oppose restrictions on stablecoin reward programmes in the CLARITY Act.

The exchange may reconsider backing the bill if it bans stablecoin issuers from offering rewards through crypto platforms, according to reports.

The issue will be debated during a US Senate Banking Committee markup session scheduled for Thursday.

Banking groups argue stablecoin rewards could drain trillions of dollars from the traditional financial system.

Pro-crypto advocates said more than 135,000 messages have been sent to senators urging protection of reward mechanisms.

The GENIUS Act bans stablecoin issuers from paying interest directly but leaves room for rewards via exchanges or third parties.

Coinbase has applied for a national trust banking charter, which could allow it to continue offering rewards under existing rules.

Stablecoins generated nearly $247 million in revenue for Coinbase in the fourth quarter, making the issue financially significant.

Lawmakers face pressure to close what banks see as loopholes that enable indirect yield on stablecoins.

Deliver real results for the American people.

Tim Scott said, expressing confidence the legislation can advance quickly.

Analysts warned US midterm elections could delay passage of the broader crypto market structure framework until later in the decade.