Coinbase Global Inc. (NASDAQ: COIN) is warning US lawmakers that it may withdraw political support for a major crypto market-structure bill if proposed limits on stablecoin rewards go too far. The exchange treats customer rewards tied to stablecoin balances as a core part of its business model. However, language being debated ahead of a bill expected to be unveiled Monday could threaten that model. Lawmakers are preparing to mark up the legislation in at least one Senate committee on Thursday.
Meanwhile, industry participants say the most contentious issue is whether platforms like Coinbase can continue offering incentives to customers who hold stablecoins. Some policymakers want to limit rewards to regulated financial institutions only. That approach is backed by parts of the US banking industry. Banks argue that yield-bearing stablecoin accounts could pull deposits out of traditional lenders.
Coinbase has applied for a national trust charter, which could eventually allow it to offer rewards under stricter rules. However, the company and other crypto-native firms are pushing back. They argue that rewards should remain legal even for platforms without bank-style charters. Executives warn that broader restrictions could distort competition across the digital asset sector.
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