- Coinbase rejects draft banning passive stablecoin yield and limiting rewards under economic equivalence rules.
- Debate reflects clash between banks and crypto firms over deposits, yield access, and financial competition.
- Legislative uncertainty affects markets as Coinbase and Circle shares react to ongoing CLARITY Act discussions.
Coinbase rejected the latest Senate stablecoin yield compromise draft tied to the CLARITY Act discussions. Punchbowl News reported the move after Coinbase raised concerns to Senate offices this week. It involved Senators Thom Tillis and Angela Alsobrooks, as the draft restricted stablecoin rewards and limited yield structures under the economic equivalence standard.
Senate Yield Language Details
The draft language bans passive yield on stablecoin balances while allowing activity-based rewards. It applies an economic equivalence standard to distinguish reward structures across platforms.
According to Punchbowl News, the proposal also restricts access to transaction size data. Coinbase previously opposed an earlier CLARITY Act draft during a Senate Banking Committee markup schedule in January.
That markup was later postponed following opposition from Coinbase and other crypto stakeholders. Reports also noted earlier White House meetings aimed to resolve stablecoin yield disagreements between industry groups.
Market And Legislative Context
Coinbase stock and Circle shares moved amid ongoing debate over stablecoin yield provisions. Coinbase reported $1.35 billion in stablecoin revenue in 2025 from USDC distribution arrangements.
These arrangements primarily stem from its partnership with Circle on USDC operations. Mizuho analysts cited the legislative impasse over the CLARITY Act as a key factor in recent share declines.
Senator Cynthia Lummis said bipartisan compromise is necessary for the bill to pass in public remarks. She added that efforts continue to protect stablecoin rewards and address concerns over deposit flight from community banks.
Patrick Witt, executive director for the President’s Council of Advisors for Digital Assets, commented on market sentiment discussions. The report also noted continued discussions despite disagreements over reward structures.
Banks argued that stablecoin yield could draw deposits away from traditional institutions. The crypto industry maintained that yield access expands financial flexibility for users and institutions. Senators continued reviewing revised text circulated by Senators Thom Tillis and Angela Alsobrooks earlier in the week. The debate centered on whether stablecoin rewards should qualify under bank-equivalent yield definitions.
