Coinbase Rejects CLARITY Act Draft as Stablecoin Yield Countdown Begins

Coinbase told the U.S. Senate earlier this week that it could not support the latest CLARITY Act text, citing significant concerns over stablecoin yield provisions. The rejection comes days after Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) released their compromise language on March 23, which bans passive yield on stablecoin balances while permitting narrower activity-based rewards tied to payments or platform usage.

David Duong, Coinbase's head of research, said the base case is to resolve the stablecoin rewards language within three weeks, targeting a Senate Banking Committee markup in the second half of April after the Easter recess ends on April 13.

The compromise framework prohibits digital asset service providers, including exchanges, brokers, and affiliated entities, from offering yield directly or indirectly on stablecoin balances. Activity-based rewards tied to loyalty programs, promotions, subscriptions, and transactions remain permitted under the draft.

Stablecoin-related revenue accounted for approximately 20% of Coinbase's total revenue in Q3 2025, making the yield restrictions a direct threat to a significant income stream. The exchange currently offers USDC rewards to eligible users, a program that would face scrutiny under the proposed rules.

The CLARITY Act is the most significant piece of crypto legislation working through Congress, covering token classification, exchange oversight, and custodian rules beyond the stablecoin yield question. Industry participants including firms linked to Andreessen Horowitz, Ripple, and Kraken have broadly supported the bill despite the yield restrictions, viewing regulatory clarity as outweighing the loss of yield-related income.

The SEC, CFTC, and U.S. Treasury would be jointly directed to define permissible rewards and draft anti-evasion rules within twelve months of enactment.

The Senate Banking Committee markup is targeted for the second half of April. If Coinbase and industry allies cannot negotiate changes before then, the bill could advance with the current restrictions intact. The CLARITY Act still faces five sequential hurdles: committee markup, a Senate floor vote requiring 60 votes, reconciliation with the Agriculture Committee version, reconciliation with the House-passed version from July 2025, and a presidential signature.