Coinbase CLO Tells Lawmakers to Back Crypto Rewards or Abandon CLARITY Act
Coinbase Chief Legal Officer Paul Grewal has advised lawmakers they can’t again the CLARITY Act whereas opposing crypto rewards. His public intervention comes as Senate stablecoin yield negotiations enter a important stretch.
The pushback arrived in a public submit on X. Grewal framed the controversy as a binary selection for legislators weighing the Tillis-Alsobrooks yield compromise.
Banks and Crypto Clash Over Stablecoin Yield
The Senate draft from Thom Tillis and Angela Alsobrooks would ban passive yield on stablecoin balances. It would allow solely slim activity-based rewards tied to funds, transfers, or platform use. Banking groups have lobbied for an excellent tighter restriction. They argue that rewards on idle balances might set off deposit flight from conventional banks.
Grewal has dismissed the deposit flight argument for months, calling it a theoretical declare unsupported by information. A current White House Council of Economic Advisers report backed him up. It discovered that banning stablecoin yield would improve financial institution lending by simply 0.02%.
Stablecoin-related income made up roughly 19% of Coinbase’s 2025 revenue, in accordance to Bloomberg Intelligence. The remaining textual content is financially materials for the alternate and its largest rivals.
The Legislative Clock Is Running Out
Senator Cynthia Lummis has warned that the invoice might slip to 2030 if it misses the midterm window. The Senate Banking Committee pulled it from the April 20 schedule. That choice has bolstered fears that the window is closing quick.
Grewal’s newest intervention sharpens the political calculus for undecided senators. The present compromise forces a selection between the banking foyer and a crypto sector that views activity-based rewards as a tough ground.
Whether that ground survives committee markup will determine if the CLARITY Act clears the Senate in 2026.
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