Coinbase Inc. has reportedly threatened to withdraw its support for U.S. cryptocurrency legislation due to proposed restrictions on stablecoin interest payments, according to secondary news reports. While primary sources have not confirmed an explicit withdrawal threat, the debate highlights significant tensions between the crypto industry and regulators over stablecoin policy.
The core issue centers on the GENIUS Act and its provisions that would ban interest payments on stablecoins. Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal are actively advocating for amendments. Armstrong has publicly urged the Treasury to "limit the ban on interest only to issuers, exclude non-financial software, and adopt fit-for-purpose tax and cash-equivalent collateral to onshore stablecoin adoption." The company's stance is that such a broad ban would stifle innovation and hinder the onshoring of stablecoin adoption in the United States.
This regulatory clash occurs against the backdrop of Coinbase's strategic expansion into Europe and its focus on institutional growth throughout 2024-2025. The company's Q2 2025 shareholder letter, cited in reports, highlights remarks by CFO Alesia Haas on international strategy and by President & COO Emilie Choi on European expansion. Furthermore, Chief Policy Officer Faryar Shirzad has emphasized institutional product growth.
The reported legislative threat has sent ripples through the industry, raising questions about the future of stablecoin policy and the potential for a significant shift in Coinbase's advocacy efforts. Stakeholders are awaiting official clarification from Coinbase, as the current claims rely on secondary coverage without solid primary-source confirmation. The outcome could influence financial stability within the crypto sector and lead to regulatory adjustments.
Concurrently, the U.S. regulatory environment is shifting, with reports citing a "new regulatory era" offering clarity and a comment attributed to the U.S. President about having "ended the Biden administration’s war on crypto." This evolving landscape is expected to facilitate cross-border crypto activities and boost institutional involvement, potentially increasing liquidity for major assets.
