## Regulatory Game Escalates: Crypto Giants and Congress Clash Over Stablecoin Yields

The latest draft of the Senate Banking Committee's "CLARITY Act" is becoming a new focal point between Washington and Silicon Valley. As a leading industry exchange, Coinbase CEO Brian Armstrong recently voiced serious concerns on social media about the draft, even issuing a stark warning: "Better no bill than a bad one."

This stance reflects the increasingly intense conflict between the cryptocurrency industry and traditional financial regulatory frameworks.

## Catalyst: Who Defines Digital Assets?

The core goal of the "CLARITY Act" is to establish clear regulatory boundaries for the U.S. digital asset market. Specifically, the bill attempts to delineate responsibilities between the SEC (U.S. Securities and Exchange Commission) and the CFTC (U.S. Commodity Futures Trading Commission) by clarifying definitions of categories such as "digital commodities," "investment contracts," and "payment stablecoins."

It sounds reasonable, but Coinbase believes there are three major issues with the current draft:

First, it effectively bans tokenized securities; second, it imposes new restrictions on decentralized finance (DeFi), which could grant the government broad access to user financial data; third, it weakens the CFTC's role while strengthening the SEC's authority. In Armstrong's view, such a design would worsen the situation for the U.S. crypto industry compared to the current regulatory environment.

## Stablecoin Yields: Traditional Banks' "Nightmare"

What Coinbase finds truly unacceptable are the provisions in the bill regarding stablecoin yields.

Behind this is a business reality: Coinbase earns interest income from reserves of stablecoins like USDC, providing yield incentives to users. For example, Coinbase One users can earn approximately 3.5% annualized returns. This model generated about $1.3 billion in revenue for Coinbase in 2025 and has become a key part of the company's business model.

If the bill bans stablecoin yield rewards, this revenue stream would be cut off. Traditional banks argue that such a move is justified: offering yield-bearing stablecoins attracts users to shift deposits from traditional banks to crypto platforms.

But the crypto industry's counterargument is equally strong — banning yield rewards would stifle innovation, ultimately driving users to overseas trading platforms.

## Senate Vote Imminent: Parties Take Stances

The Senate Banking Committee plans to vote on the "CLARITY Act" on January 15. Coinbase's firm stance is essentially a final push of pressure before the senators cast their votes.

Interestingly, MicroStrategy Chairman Michael Saylor also reposted Armstrong's message in support, indicating that this concern is not just Coinbase's but reflects a broader industry dissatisfaction with the current regulatory draft.

However, Armstrong later shared some optimistic signals. He stated that through continued efforts, an ideal outcome might be achieved, and pledged that Coinbase will remain actively involved in negotiations to help establish a legal framework that allows cryptocurrencies and traditional finance to compete fairly.

In other words, opposition exists, but the door to negotiations is still open.