Coinbase Signals Breakthrough on Key Provision in U.S. Crypto Legislation

Coinbase said a deal has been reached on a critical provision in a landmark U.S. cryptocurrency bill, potentially clearing the way for the legislation to advance in the Senate after months of delays.

The bill had stalled earlier this year amid opposition from banks, which raised concerns over provisions allowing stablecoin issuers and crypto firms to offer yield-bearing products and rewards. Financial institutions argued such incentives could draw deposits away from traditional banks, undermining their ability to fund lending activities.

Crypto companies, including Coinbase, pushed back strongly, maintaining that offering rewards is essential to attracting users and fostering adoption. The disagreement has now led to a compromise that balances both sides’ concerns.

According to details reported by Punchbowl News, the revised language introduces restrictions on rewards that are “economically or functionally equivalent” to interest payments on bank deposits. At the same time, it preserves the ability for crypto platforms to offer certain incentives tied to actual usage of their services.

Coinbase’s Chief Policy Officer, Faryar Shirzad, said the agreement ensures that Americans will still be able to earn rewards through legitimate engagement with crypto networks, while addressing regulatory concerns raised by the banking sector.

The updated proposal, reportedly shaped by Senators Thom Tillis and Angela Alsobrooks, also directs regulators to develop a new framework for stablecoin oversight. This includes enhanced disclosure requirements and clearer guidelines on permissible reward structures.

The broader legislation—often referred to as the Clarity Act—aims to bring greater regulatory certainty to the cryptocurrency industry, which has long operated in a legal gray area. Industry executives argue that clearer rules would support innovation and accelerate mainstream adoption.

The push for reform aligns with the policy priorities of Donald Trump, who has emphasized cryptocurrency regulation during his current administration and previously engaged with the sector during his campaign.

While the compromise marks a significant step forward, the bill’s final passage remains subject to further debate and verification of the proposed provisions.