Coinbase said on Friday that lawmakers have reached an agreement on a central provision in high-profile crypto legislation, a step that could allow the bill to advance in the U.S. Senate.
The measure had run into trouble earlier this year after banks objected to language that would have allowed stablecoin issuers and crypto firms to provide yield-bearing products and other rewards denominated in stablecoins. Banks argued those reward programs could draw deposits away from traditional lenders and complicate their ability to fund lending activities.
Crypto firms, including Coinbase, countered that the capacity to offer rewards is essential to attract customers and that an outright ban on such incentives would unfairly limit competition.
Faryar Shirzad, Coinbase's Chief Policy Officer, said in a post on X that while banks won additional restrictions on rewards, Coinbase and its allies preserved critical elements. "In the end, the banks were able to get more restrictions on rewards, but we protected what matters - the ability for Americans to earn rewards, based on real usage of crypto platforms and networks," he wrote.
Punchbowl News, which reported the text of the compromise negotiated by Senators Thom Tillis and Angela Alsobrooks, said the agreed language contains a broad ban on rewards offered "in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit."
That same draft reportedly instructs regulators to propose a set of new stablecoin regulations. Among the directives are the creation of a fresh stablecoin disclosure regime and the development of a list outlining which reward activities would be permissible.
The report of the compromise could not be independently verified at the time of publication.
Executives in the crypto industry have frequently described their operations as occurring within a regulatory gray area, a condition they say has hindered business planning and growth. Proponents of the proposed Clarity Act contend that explicit rules would help spur broader adoption of cryptocurrency by removing uncertainty.
Support for reform at the federal level has been highlighted as a priority by President Donald Trump during his second administration, with the president having campaigned to attract crypto-related contributions and with family members who have profited from their own token. That political emphasis has kept momentum behind efforts to establish clearer regulatory guardrails for the sector.
Context and next steps
Legislative negotiations appear to have struck a balance between bank concerns about deposit competition and the crypto sector's need to offer competitive rewards. Moving forward, regulators will be tasked with defining the specifics of permissible reward activities and creating disclosure requirements for stablecoins as directed by the bill's text.