The standoff between Coinbase and the US Senate intensified this month when the exchange officially told the Senate offices that it would not support the latest draft of the CLARITY Act, marking its second withdrawal from legislation that could define US digital asset law in a generation.
Summary
- Coinbase told the offices of the Senate Banking Committee that it has significant concerns about the draft Tillis-Alsobrooks compromise, which prohibits passive yield on stablecoin balances and prevents access to transaction size data used to calculate rewards, changes that attack the infrastructure Coinbase uses to generate stablecoin income instead of limiting one aspect of the product.
- Coinbase reported $1.35 billion in stablecoin revenue in 2025, mostly tied to its USDC distribution agreement with Circle; provisions that end stablecoin yields could deprive the exchange of an estimated $800 million in annual revenue, making this a primarily financial question rather than a policy objection.
- CEO Brian Armstrong started his support in January, saying “we’d rather have a bill than a bad bill”; the second official repeal, reported by Punchbowl News around March 25, followed a revised draft that further strengthened the harvest language rather than loosening it.
As TheStreet reported, Coinbase representatives told the Senate offices that the exchange could not support the latest version, citing significant concerns about the production language of the stablecoin. Armstrong confirmed negotiations are ongoing. The Tillis-Alsobrooks draft goes beyond the bill’s existing profit limits by further limiting exchanges’ access to transaction size data, which is the computational layer that makes volume-based or activity-based stablecoin rewards technically available. For Coinbase, that second provision is the most alarming because it removes not only the product aspect but the technical infrastructure needed to produce the yield at all.
Stablecoin revenue represents about 20 percent of Coinbase’s total revenue by 2025. Under its USDC agreement with Circle, Coinbase receives most of its interest income from USDC held on its premises. Any limitation that removes the ability of a structure to calculate or distribute an attack yields that directly. Every round of negotiations since January has reduced yields, not increased them. Coinbase’s leverage is real: a markup without its endorsement signals to senators on both sides that the industry consensus is broken, and the bill needs bipartisan votes that it can’t afford to lose.
Industry Fragmentation and What It Means
Coinbase is not the whole industry. Andreessen Horowitz and other major investors have publicly supported the CLARITY Act even in its current form, arguing that the institutional legitimacy the bill provides trumps stablecoin revenue agreements. An industry call in late March reportedly revealed disagreement over how to proceed. As crypto.news reported, the CLARITY Act faces four groups each with effective veto power, and Coinbase’s reserved support doesn’t automatically kill the bill but makes vote counting more difficult.
What the May Deadline Means for Both Parties
As crypto.news noted, the stablecoin draft of the GENIUS Act is advancing with financial regulators regardless of CLARITY’s future. What CLARITY provides, including regulatory clarity for the SEC and CFTC, DeFi oversight rules, and tokenized equity structures, has no legal alternative. Senator Bernie Moreno warned that May’s deficit risked losing the credit until the middle of the season altogether. The Senate Banking Committee’s marketing goal remains in late April, and Coinbase’s continued refusal to approve the draft is the single biggest obstacle between that goal and an actual vote.
