Coinbase representatives met with Senate lawmakers on Monday to express opposition to language around stablecoin yields included in the latest compromise version of the Senate’s crypto market structure bill. The exchange’s objections were reported by Punchbowl News on Wednesday, citing four people briefed on the meeting. A proposal circulating earlier this week would have barred third parties, including exchanges, from paying stablecoin yields to customers. The measure was designed to address banking industry concerns about the risk of customers moving deposits away from traditional banks.
Coinbase is among the largest crypto lobbying forces in the United States. The exchange previously withdrew its support for the bill in January, a move that came shortly before the Senate Banking Committee indefinitely postponed a scheduled markup to advance the legislation. The company did not immediately respond to a request for comment on its latest position.
Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks are leading the current push to advance the bill, with negotiations described as ongoing. The legislation broadly aims to establish a regulatory framework for how authorities should oversee the crypto industry. The central point of contention between the crypto and banking lobbies has been the question of stablecoin yields.
Banking groups contend that allowing exchanges to pay stablecoin yields represents a loophole in the GENIUS Act, which prohibited stablecoin issuers from paying yield directly to holders. They argue the practice poses a systemic risk of deposit flight from the banking system. The crypto lobby, in turn, has maintained that these risks are overstated and has accused banks of engaging in anticompetitive behavior to protect their market position.
The White House has hosted at least three meetings in an effort to broker a compromise between the two sides, though no agreement has yet been reached. Republicans are pressing to pass the bill before the midterm elections, when shifts in the composition of Congress could undermine the legislative momentum. The House passed its version of the legislation, known as the CLARITY Act, in July.
Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, posted on X on Wednesday dismissing what he called uninformed fear, uncertainty, and doubt circulating on social media. He added that the situation would resolve favorably. Republican Senator Cynthia Lummis also posted on X the same day, warning that Congress could not afford to wait until 2030 for another opportunity to pass crypto legislation. She stated that bipartisan compromise is necessary for the Clarity Act to succeed and said lawmakers are working to protect stablecoin rewards while also preventing deposit flight from community banks.
Originally reported by CoinTelegraph.
