Coinbase lobbies Congress to protect stablecoin revenue

Coinbase Global Inc. is lobbying in Washington to protect its stablecoin revenue, which accounted for about 19% of its total in 2025, according to Bloomberg.

The company’s stablecoin income grew 48% last year, mainly from interest on USDC balances, but faced challenges in late 2025 due to decreased trading activity.

The Genius Act was signed into law in July 2025, but draft legislation is still being negotiated to tighten restrictions on interest payments and rewards on stablecoins.

These changes could affect Coinbase’s revenue-sharing agreement with Circle Internet Group, which issues USDC.

Industry opponents, including banks, argue that allowing yield payments could destabilize the financial system, while crypto firms say it benefits consumers.

Coinbase CEO Brian Armstrong supports a compromise after previously withdrawing support from some draft bills.

Despite recent market declines, analysts remain optimistic about Coinbase’s long-term prospects.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

The lobbying fight turns on how lawmakers read a law already on the books

The clash centers on how the GENIUS Act (signed into law in July 2025) gets applied. The statute bars stablecoin issuers from offering yield or interest on payment stablecoins 1.
Banks say the text leaves room for other intermediaries, including crypto exchanges, to pay interest or rewards on stablecoin balances 2.
They worry stablecoins could start acting like savings accounts without the same protections. Community banks could face large deposit outflows 2.
Lobbying now targets draft legislation, with banks pushing an amendment that would block stablecoin interest payments and tighten limits on similar rewards 2.

The stablecoin dispute could shift competition between crypto platforms and banks

What gets written into the next bill will shape how financial technology competes with banks.
The argument focuses on whether stablecoins stay limited to “payment instruments” or move into higher-yield products that rival bank savings accounts 1.
A wide rewards prohibition would preserve the deposit model used to fund lending by curbing crypto platform competition 2.
If exchanges can pay yield, market competition for deposits could intensify. Banks could feel pressure to innovate instead of leaning on rules to cap stablecoin rewards 3.