Coinbase Chief Legal Officer Paul Grewal said lawmakers are close to reaching an agreement on the stablecoin yield debate within the proposed Clarity Act. Speaking during an interview on Fox Business, Grewal stated that meaningful progress is being made despite ongoing disagreements about whether stablecoin platforms should be allowed to offer rewards on idle balances.
Grewal emphasized that negotiations are nearing completion, noting that policymakers increasingly recognize the importance of balancing consumer rewards with broader regulatory safeguards. He added that the legislation aligns with Donald Trump’s stated goal of positioning the United States as a global leader in cryptocurrency innovation.
Banking Sector Pushes Back Against Stablecoin Rewards
The U.S. banking sector has actively lobbied lawmakers to include language preventing crypto platforms from offering yield on stablecoin holdings. Banks argue that allowing such rewards could create incentives for customers to move deposits away from traditional banking institutions, potentially leading to significant deposit flight.
However, Grewal challenged those claims, stating there is no factual evidence showing that stablecoins have caused deposit flight from banks. He acknowledged that the risk is often discussed in theory, particularly regarding community banks, but maintained that real-world data has not supported those concerns.
Senate Review and Long-Term Industry Impact Expected
Grewal expressed confidence that legislative progress will continue in the coming weeks, with a markup hearing expected before the US Senate Banking Committee ahead of a possible floor vote.
Meanwhile, Brian Armstrong has repeatedly opposed versions of the legislation that would restrict rewards on idle stablecoin balances, arguing such limits could slow innovation and disadvantage consumers.
During the same period, Coinbase Global Inc. shares listed on the Nasdaq have declined significantly, falling about 50% over the past six months. The stock closed down 0.9% on Wednesday at $172.99, reflecting continued pressure from the broader downturn in cryptocurrency markets.
Disclaimer
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