Coinbase Again Rejects Support for the New Draft of the CLARITY Act

Mars Finance reports that on March 26, the “Cryptocurrency Market Structure Act” (also known as the CLARITY Act) was once again met with opposition from Coinbase. A Coinbase representative stated this week in a Senate office that they have not yet supported the latest version of the legislation and expressed significant concerns about the new “stable yield” provisions. This is not the first time Coinbase has pushed back on stablecoin rewards. In January, Coinbase CEO Brian Armstrong withdrew his support for the legislation for the same reason, saying, “We would rather have no bill than a bad one.” The latest draft of the CLARITY Act explicitly bans crypto platforms from offering yields to stablecoin holders, whether these rewards are provided “directly” or “indirectly,” especially when such rewards resemble interest-bearing accounts. The bill specifically prohibits incentives that are economically equivalent to interest but allows limited activity-based rewards. The legislation aims to clarify how the U.S. regulates cryptocurrencies, with the rules around stablecoin rewards becoming a focal point of controversy. Banks have long argued that if stablecoins can offer rewards, it will lead bank customers to withdraw deposits from savings accounts and hold higher-yield stablecoins instead. The cryptocurrency industry, on the other hand, believes that this move by banks is purely an attempt to avoid competition.