Coinbase says deal reached on key provision of crypto bill

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May 1 : Coinbase said on Friday a deal has been reached on a key provision in a landmark crypto legislation that could clear the path for the bill to move forward in the U.S. Senate.

• The bill stalled earlier this year because banks opposed a provision allowing stablecoin issuers and crypto firms to offer yield-bearing products and other rewards paid on stablecoins that could lure away bank deposits, making it harder for them to fund lending.

• Crypto giants such as Coinbase said they must be able to offer rewards to recruit customers and that barring them would be anticompetitive.

• "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," Coinbase's Chief Policy Officer Faryar Shirzad said in a post on X.

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• Punchbowl News, which reported the text of the compromise finalized by Senators Thom Tillis and Angela Alsobrooks, said the language includes a broad prohibition 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".

• The text also directs regulators to propose a new series of stablecoin regulations, including the development of a new stablecoin disclosure regime and a list of permissible reward activities, Punchbowl News added. Reuters could not immediately verify the report.

• Crypto companies have been operating in a regulatory gray area, which executives say has stymied their businesses. The proposed Clarity Act aims to create clear regulations that should help promote cryptocurrency adoption.

• President Donald Trump, who courted crypto cash on the campaign trail and whose family has profited from its own token, has prioritized crypto reform during his second administration.

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