Coinbase (NASDAQ:COIN) has warned U.S. lawmakers it could withdraw support for a major crypto market-structure bill if new provisions restrict its ability to offer rewards on stablecoin holdings.
What Happened: The bill is headed for Senate committee markup this week, but proposed changes would limit stablecoin rewards to regulated banks or trust-chartered institutions.
Bloomberg reported on Monday the push is backed by the banking lobby and opposed by crypto-native firms.
Stablecoin rewards are a key revenue source for Coinbase, largely tied to interest earned on USDC (CRYPTO: USDC) reserves shared with Circle (NYSE:CRCL).
Coinbase generated about $1.3 billion in stablecoin-related revenue in 2025. Restrictions could reduce USDC balances on the platform and materially impact earnings.
The dispute has weakened bipartisan support for the bill and raised the risk of delays.
While the recently passed GENIUS Act bars stablecoin issuers from paying yield, it allows third parties such as exchanges to offer rewards, a loophole banks are now seeking to close.
Crypto firms argue this would hurt competition, undo prior compromises, and weaken the dollar's global positioning.
Why It Matters: Bernstein said the window to pass a U.S. crypto market-structure bill is narrowing, with the core obstacle now a growing conflict between banks and the crypto industry over stablecoin rewards, The Block reported.
Analysts note the bill's fate hinges less on token classification or DeFi rules and more on whether lawmakers can resolve concerns that stablecoins could siphon deposits from traditional banks.
Bernstein warned the legislation must advance by Q2 or risk stalling amid midterm election politics, even under a pro-crypto Trump administration.
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