Authored by Jesse Coghlan via CoinTelegraph.com,
Crypto exchange Coinbase is reportedly against the latest compromise over stablecoin yields that the Senate is looking to include in its crypto market structure bill.
Coinbase representatives told Senate lawmakers in a meeting on Monday that they had concerns over the language around stablecoin yields in the new compromise version of the bill, Punchbowl News reported Wednesday, citing four people briefed on the exchange.
A proposal that circulated earlier this week would have reportedly prevented third parties, such as exchanges, from paying stablecoin yields, a measure aimed at addressing banks’ concerns over the risk of deposit flight.
Coinbase is one of the largest crypto lobbyists in the US, and its withdrawal of support for the bill in January came just before the Senate Banking Committee indefinitely postponed a markup to advance the legislation.
Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks are leading the latest effort to advance the bill, and talks are reportedly ongoing. Coinbase did not immediately respond to a request for comment.
Senator Alsobrooks, pictured at a banking event in early March, said the compromise bill may leave both crypto and the banks unhappy. Source: American Bankers Association
The fight between the crypto and banking lobbies over the Senate’s bill, which aims to outline how regulators should approach crypto, has largely revolved around stablecoin yields.
The White House has hosted at least three meetings for the groups to agree on a compromise, which has yet to materialize.
Banking groups argue that stablecoin yield payments by exchanges are a loophole in the GENIUS Act, which banned stablecoin issuers from paying yield to holders, and present a risk of deposit flight from the banking system.
Stablecoin yields are a major business for crypto exchanges, and the crypto lobby has argued that the risks are overstated and has accused the banks of anticompetitive behavior.
Republicans are pushing to pass the bill ahead of the midterms, where the makeup of Congress could change and derail momentum around the legislation. The House passed its version of the bill, called the CLARITY Act, in July.
Patrick Witt, the executive director of the President’s Council of Advisors for Digital Assets, posted to X on Wednesday that there was “plenty of uninformed FUD [fear, uncertainty and doubt] circulating on social media this week.”
“It’s all going to work out. Bullish,” he added.
Republican Senator Cynthia Lummis also posted to X on Wednesday that “we can’t wait until 2030 for another chance” to pass the crypto bill.
“Bipartisan compromise is necessary for the Clarity Act to pass,” she added. “We’re working around the clock to ensure stablecoin rewards are protected and to prevent deposit flight from community banks.”