A loophole for rewards could protect Coinbase from a looming D.C. ban on stablecoin interest payments

Coinbase faces a significant threat from the proposed CLARITY Act in Washington, which aims to regulate stablecoins and might prohibit stablecoin issuers from paying interest directly to holders. However, industry sources suggest a loophole exists where exchanges could still distribute 'rewards,' rebates, or loyalty incentives that mimic yield, technically complying with the ban on 'interest.' This distinction is crucial as stablecoins like USDC are a major revenue driver for Coinbase, bringing in $1.35 billion in 2025. Analysts suggest that while the loss of direct yield sharing is important for user attraction, it is not 'existential' for Coinbase's overall business, which relies heavily on trading revenue. Furthermore, the bill includes a carveout for payments tied to activity, potentially allowing yield to be generated via DeFi protocols before being passed to users. While Coinbase CEO Brian Armstrong noted a ban would paradoxically make the company more profitable by cutting reward payouts, he prefers the status quo for customer benefit and global competitiveness. Ultimately, even if strict limits pass, industry experts believe crypto firms will adapt to keep stablecoins competitive.

(Source：CoinDesk)