P assive yield paid simply for holding a stablecoin balance will be banned under a new legislative compromise that has ended a regulatory deadlock. The Tillis-Alsobrooks Compromise, which allows for activity-based rewards such as transaction rebates and loyalty programs, resolves the conflict between traditional banks and crypto exchanges.
Related Brief 19h ago
crypto regulation Coinbase Endorsement Clears Path for Clarity Act Markup by April
The Clarity Act is positioned for markup by April. This movement follows an endorsement from Coinbase CEO Brian Armstrong, who previously avoided supporting the bill due to unresolved concerns regarding stablecoin yield provisions. The endorsement is significant because Coinbase earned an estimated 20% of its 2025 revenue—$1.35 billion—from stablecoin rewards. The legislative gridlock had been sustained by the banking sector, which claimed stablecoin yields could trigger up to $6.6 trillion in deposit flight. The President’s Council of Economic Advisers rejected that figure, finding stablecoin yields have minimal impact on bank deposits.
Traditional banks, backed by the ABA and OCC, had demanded a total ban on stablecoin interest to prevent deposit flight from savings accounts paying approximately 0.1% to platforms offering 5-6% APY. Coinbase CEO Brian Armstrong had blocked the bill's markup twice to protect a stablecoin revenue stream that reached $1.35 billion in 2025, representing roughly 20% of total revenue.
Related Brief 2d ago
crypto regulation Coinbase’s $800 million revenue line is under threat — and that’s why it’s blocking the CLARITY Act
Provisions in the CLARITY Act could strip Coinbase of an estimated $800 million in annual revenue. That’s not a policy disagreement. It’s a direct hit to the core of its 2025 business model, where stablecoin revenue accounted for $1.35 billion — nearly 20% of total income. The Tillis-Alsobrooks draft doesn’t just limit a product feature; it bans passive yield on stablecoin balances and cuts off exchange access to transaction size data, the very mechanism that makes volume-based yield calculable. For Coinbase, this isn’t about principle. It’s about infrastructure. Without it, the revenue stream tied to its USDC distribution agreement with Circle collapses. The exchange formally rejected the latest draft around March 25, marking its second withdrawal from negotiations. CEO Brian Armstrong said in January, “we’d rather have no bill than a bad bill.” Now, the bill has gotten worse — from Coinbase’s perspective. Every revision has narrowed yield carve-outs, not expanded them. And while firms like Andreessen Horowitz back the legislation for the regulatory clarity it offers, Coinbase holds veto-grade influence: its opposition fractures the illusion of industry consensus. Senators need bipartisan votes, and they can’t afford to lose them. The Senate Banking Committee aims for a markup by late April. Missing that risks the entire bill fading into midterm season. Coinbase’s withheld support is the single largest obstacle standing in the way.
Resolution came after the White House Council of Economic Advisers (CEA) reported that a full ban on passive yield would cost consumers $800 million in lost annual returns while providing negligible benefit to bank deposit stability. This data validated the Tillis-Alsobrooks agreement, which grants the SEC, CFTC, and Treasury 12 months to issue synchronized rules.
Related Brief 3d ago
securities law SEC's Shift to Financial Oversighty disrupts the 'Regulation by Enforcement' era
Institutional capital flow into digital assets is increasing as the SEC has dismissed seven active litigations against crypto companies, including Binance and Coinbase. The commission has admitted that previous interpretations of federal securities laws were incorrect. This withdrawal relieves legal pressure on these entities and reduces the uncertainty regarding token classification that has that has stifled institutional capital. The shift is led by the SEC's new Director of the Division of Enforcement, David Woodcock, a CPA and auditor. SEC Chairman Paul Atkins described the appointment as part of a 'course correction' to restore market integrity and investor protection. The enforcement strategy under Woodcock is expected to prioritize accounting fraud and financial transparency over aggressive litigation against crypto platforms. Crypto firms that comply with financial reporting standards now face reduced legal risk. The Atkins Commission is expected to issue formal crypto-asset regulatory guidelines in 2026.
The shift occurred on April 10, 2026, when Armstrong reversed his opposition to the Digital Asset Market Clarity Act (CLARITY Act, H.R. 3633). The act creates the first comprehensive U.S. digital asset market structure framework, dividing jurisdiction between the SEC and the CFTC based on a "Mature Blockchain Test" for digital commodities.
Related Brief 2d ago
cryptocurrency regulation The crypto clarity act passes the house but stalls in the senate — because the industry that demanded regulation now refuses to accept it
The U.S. crypto industry spent nearly a decade demanding regulatory clarity, warning that uncertainty was driving innovation offshore. Now, with the House passing the CLARITY Act in July 2025 by a 294–134 bipartisan vote, the very industry that called for rules is blocking its path forward. The bill transfers oversight of spot digital commodity markets from the SEC to the CFTC, ends 'regulation by enforcement,' and creates a $75 million exemption from SEC registration for token sales within a 12-month window. It defines a 'digital commodity' by how tied a token is to a functioning blockchain. It allows tokens that began as securities to become commodities once their networks are sufficiently decentralized. It shields DeFi developers, wallet providers, and software builders from broker-dealer classification. For startups, that means launching in the U.S. no longer requires years of legal prep or offshore relocation. The mechanism is clear: reduce regulatory risk, keep innovation domestic. But the Senate version includes a ban on stablecoin rewards — yields paid to users who hold stablecoins like USDC on platforms. Traditional banks argue that if even a fraction of the trillions in U.S. savings accounts shift to yield-bearing stablecoins, smaller banks could face destabilizing deposit outflows. The Senate Banking Committee included the ban. Coinbase, whose partnership with Circle makes stablecoin rewards a core revenue stream, called it a 'red line.' In January 2026, it withdrew support. The January 15 hearing was rescheduled. Momentum stalled. Senators who might have advanced the bill hesitated without the largest U.S. exchange on board. The irony is self-evident: an industry that spent years insisting regulation was essential now refuses the only version within reach. Three outcomes remain: a compromise that carves out stablecoin rewards, passage without Coinbase, or failure. If Republicans lose their congressional majority on November 3, 2026, the bill dies. The regulatory limbo that drove startups to Singapore, Switzerland, and the UAE will persist — not because Washington failed to act, but because the industry that demanded action cannot agree on what it wants.
With the roadblocks cleared, the Senate Banking Committee is targeting a late-April markup session. The bill must face a floor vote by May to avoid being killed by 2026 election-year politics.
Related Brief 1d ago
stablecoin regulation Treasury Department Proposal Would Mandate Technical Kill Switches in Stablecoins
Stablecoin users will face restricted access to funds, reduced on-chain privacy, and an increase in wallet freezes and asset seizures. This is the result of a a Treasury Department proposal to implement the GENIUS Act, which treats permitted payment stablecoin issuers as permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act. Under this rule, the US Treasury, through FinCEN and OFAC, { "// own single quote quote: the source material provided does not contain a quote from a person, and the "// own single quote quote: the source
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