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Coinbase, the largest cryptocurrency exchange in the US, sent a clear message to Senate offices this week: “We cannot support the latest stablecoin yield compromise of the CLARITY Act.” According to an exclusive report by Punchbowl News dated March 25, 2026, Coinbase representatives informed the Senate in a closed-door meeting on Monday that they had “significant concerns” about the new compromise text spearheaded by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD).
This development is not just an objection from one company; it creates a new and critical impasse in the Digital Asset Market CLARITY Act process, which has been moving forward with great hopes for months. Optimism peaked last week with Senator Cynthia Lummis’s statement that “99% resolved, bipartisan compromise coming soon.” Now, Coinbase’s resistance is jeopardizing the bill’s markup process in the Senate Banking Committee.
🕵️What Did the Compromise Propose, and Why Was Coinbase Against It?
The latest text prepared by the Tillis-Alsobrooks duo aimed to tighten stablecoin rewards to prevent "deposit flight," the biggest fear of banks:
- It completely banned balance-based yields,
- It treated all "economically equivalent" rewards like bank interest,
- It only allowed limited rewards based on active use or transactions.
Coinbase, however, argues that this language is too vague and restrictive. The company states that the annual rewards of around 3.5-4% it offers on stablecoins like USDC (approximately $1.35 billion in revenue in 2025) will be severely reduced, users will be deprived of these incentives, and innovation will be undermined. According to Coinbase, despite its claim to "protect innovation," the proposal actually puts crypto platforms at a disadvantage compared to traditional banks.
This is Coinbase's second major objection. In January 2026, a similar compromise led to the withdrawal of support and a postponement of the markup. Now, the division within the sector is deepening: some crypto companies are saying "let's compromise to save the law," while Coinbase and a few other big players want "clear rules without compromise."
Market Reaction and Time Pressure
Following the news, Coinbase (COIN) and Circle (CRCL) shares fell sharply. Analysts estimate that the probability of the CLARITY Act passing this year has fallen to 61%. The Senate Banking Committee markup, targeted for the end of April, is once again in jeopardy. With the congressional calendar tightening before the 2026 midterm elections, every delay reduces the chances of the law passing.
Senator Lummis' warning that "we can't wait until 2030" remains on the table. However, the banking lobby (ICBA, JPMorgan, Bank of America) continues to argue that stablecoin yields could attract trillions of dollars in deposits. Coinbase, on the other hand, emphasizes that these rewards strengthen dollar dominance and crypto innovation in the US. Win-Win or a New War?
This development shows that the biggest tension between crypto and traditional finance remains unresolved.
- Coinbase's stance: "Rewards that benefit the user must be protected; otherwise, regulation will be worse than the status quo."
- Bank's stance: "Stablecoins shouldn't erode our deposits."
- Other crypto players: "Let the law pass, then we'll fix it in court or through regulation."
Realistic view: Without bipartisan support, the filibuster obstacle cannot be overcome. Coinbase's resistance could kill the law or soften it further. However, a complete "rewards ban" will not pass the Senate.
In conclusion, the CLARITY Act is still alive but its pulse is weak. Coinbase's objection is putting negotiations back on the table. Senators, the Tillis-Alsobrooks team, and the crypto lobby will engage in intense discussions in the coming days. The April markup will either be cancelled or saved by a new compromise.
The US's dream of becoming the "digital asset capital of the world" is being tested once again in this stablecoin yield war. Coinbase's statement that "we can't support it yet" isn't just the voice of one company; it's a critical warning that will shape the future of the sector. We'll be watching – because 2030 is truly a long way off.
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⚡Wyoming Senator Cynthia Lummis, one of the most influential crypto advocates in the US Senate, clearly laid out the fate of crypto regulation in a statement dated March 25, 2026: “Bipartisan consensus is essential for the passage of the CLARITY Act. We are working day and night to protect stablecoin rewards while preventing deposit flight from community banks. America’s financial future is now at stake – we cannot wait for another chance until 2030.”
This statement is not just a senator’s personal opinion; it marks a turning point in the Digital Asset Market CLARITY Act process, which has been stalled in the Senate for months. H.R. The law, known as 3633, aims to bring long-awaited "clarity" to the digital asset market: it clarifies whether digital assets are securities or commodities, defines the division of authority between the SEC and the CFTC, strengthens consumer protections, and aims to make the US the "digital asset capital of the world," in line with Trump's promise.
👀 Stablecoin Rewards and Bank Concerns
🤔 Where is the Compromise?
The biggest obstacle to the law was the "yield" debate surrounding stablecoins. The GENIUS Act, passed last year, prohibited stablecoin issuers from paying interest directly. However, exchanges and platforms could offer users activity-based or holding-based rewards. Community banks and the traditional banking lobby argued that these rewards would lead to deposit flight, threatening local lending and business financing, especially for smaller banks. Banks stated that trillions of dollars in deposits could shift to stablecoins.
Lummis and Republican Senators made critical progress in closed-door meetings this week. The bipartisan agreement, spearheaded by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), doesn't completely ban stablecoin rewards; however, it prevents the use of banking terms like "yield" and "APR," and prevents rewards from being directly tied to the balance amount. In short, rewards are preserved, but they cannot be marketed "like a bank product." According to Lummis's team, negotiations are "99% resolved"; the remaining obstacles are political, not technical.
This agreement protects both crypto innovation and the stability of the banking system. Lummis emphasizes this balance, stating, "We are protecting innovation but also preventing deposit flight."
⚡2026 Elections and Global Competition
Lummis's warning that "we can't wait until 2030" is not without reason. With the 2026 midterm elections approaching, the Senate's schedule is tightening. The Senate Banking Committee is scheduled to finalize the bill at the end of April (after Easter). If the bill passes the Senate, the reconciliation process with the House will begin. However, time is running out: Congressional recesses, budget negotiations, and the election atmosphere could slow everything down.
Furthermore, global competition is intensifying. Singapore, Europe, and the United Arab Emirates are attracting crypto capital with clear rules and attractive returns. The US is risking dollar dominance and innovation without clear regulation. Lummis sees Trump's promise to "make America the digital asset capital" as materializing with the CLARITY Act: "With this law, we will achieve this. Let's finish it once and for all."
🤔 Is This Compromise Really a Win-Win?
Critics (especially some within the crypto community) say the compromise gives too many concessions to banks, limits passive returns, and hinders genuine DeFi competition. Some react by saying "banks are killing innovation." On the other hand, those who are realistic see this: A purely “anti-bank” bill would never pass the Senate. Without bipartisan support, the filibuster obstacle cannot be overcome. Lummis’s approach is pragmatic: advancing crypto not by fighting banks, but by striking a smart balance.
If this bill passes 🤔
- Clear rules will finally come to the crypto sector; innovation will accelerate, and capital will stay in the US.
- Community banks will gain deposit security, and support for the local economy will continue.
- Consumers will both benefit from stablecoins and be protected from banking risks.
🕵️In short, Senator Lummis’s call is not just for a bill, but an urgent call for America’s financial future. The CLARITY Act brings crypto and traditional finance together, rather than pitting them against each other. The April markup and the year-end Senate vote will show whether this compromise will bear fruit.
⚡The US leadership in the digital age no longer lies in the corridors of Congress, but in the permanence of this critical compromise. As Lummis said: Time is running out and 2030 is far away.
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