TL;DR:
- Paul Grewal, CLO of Coinbase, conditions support for the CLARITY Act on the inclusion of crypto rewards, rejecting current restrictions proposed by the Senate.
- A White House report indicates that banning stablecoin yields would only increase bank credit by 0.02%, debunking fears of a deposit flight.
- With stablecoin revenue representing 19% of Coinbase’s earnings in 2025, the future of the regulation is financially critical for the sector.
Paul Grewal, Chief Legal Officer of Coinbase, issued an ultimatum to U.S. lawmakers, stating they must support rewards in crypto assets or abandon the CLARITY Act. This public intervention comes at a critical moment as stablecoin yields are being negotiated in the Senate.
You can’t be for CLARITY and against rewards. It’s one or the other. Time to choose.
— Paul Grewal (@iampaulgrewal) April 21, 2026
Grewal’s stance responds to the draft presented by Senators Thom Tillis and Angela Alsobrooks, which seeks to prohibit passive yields on stablecoin balances. Currently, the industry argues that limiting these earnings would harm the digital ecosystem’s competitiveness against traditional banking.
From a technical perspective, the financial impact is massive, considering that income linked to stablecoins generated nearly a fifth of Coinbase’s turnover last year. The market is cautious as it observes how the banking lobby pressures to prevent a massive flight of capital from traditional savings accounts.
Legislative Challenges and Market Impact
On the other hand, Grewal dismissed arguments regarding banking instability, calling them theories without verifiable empirical support. The crypto sector uses data from the Council of Economic Advisers to demonstrate that the coexistence of both systems does not jeopardize banking liquidity.
Consequently, the debate has polarized between those demanding restrictive regulation and those who see activity-based rewards as a non-negotiable baseline. Proponents of software and digital transfers believe that banning these incentives will stall technological innovation in the country.
As sessions progress, the urgency grows due to warnings from figures like Cynthia Lummis, who fears the project could be delayed for years. If the proposal fails to reach a quick consensus, the 2026 legislative cycle could close without a clear structure for digital assets.
Additionally, the project’s removal from the Banking Committee’s agenda on April 20 raised alarms about a potential long-term stalemate. Market players fear that a lack of regulatory clarity will drive companies to seek more friendly jurisdictions outside the United States.
Nevertheless, Coinbase’s firmness seeks to force a political decision that defines the role of stablecoins as payment tools with tangible benefits. The confrontation with traditional financial institutions will set the tone for the upcoming hearings in Washington.
The fate of the CLARITY Act depends on whether the Senate accepts activity-based rewards as an acceptable middle ground. If not accepted, support from the crypto industry will vanish, leaving the regulation in a legal limbo that could last until the next decade.
