A US Congressman has made it clear to the Senate that it should expedite the passage of the House's cryptocurrency bill, or else it should step aside. This move aims to convey a message to Senate Banking Committee Chairman Tim Scott (R-SC), indicating that the prolonged debates in the Senate have become a potential negative factor, affecting not only the crypto industry itself but also posing challenges to the Republican agenda as the election cycle approaches.
Profitability Dilemma Remains Unresolved
The crux of the deadlock lies in a seemingly simple question: Can crypto platforms pay users interest on stablecoin holdings?
Traditional banks have taken a negative stance, arguing that stablecoin yield programs would siphon deposits away from traditional financial institutions, thereby disrupting the stability of community banks and potentially giving rise to a so-called “shadow banking” system. The crypto industry has strongly countered this, likening stablecoin rewards to returns from money market funds, and asserting that any prohibitive measures would undermine the global competitiveness of the United States.
The GENIUS Act, signed into law in July 2025, essentially prohibits stablecoin issuers from directly paying interest, but leaves room for reward programs offered by third-party platforms like Coinbase. This “loophole” quickly became a new focal point of contention.
On February 25, 2026, the Office of the Comptroller of the Currency (OCC) proposed a rule aimed at closing this gap. The rule seeks to establish a “rebuttable presumption” that third-party yield arrangements are, in effect, illegal interest payments. This proposal has significantly heightened tensions among stakeholders.
Coinbase's Shift in Stance
One of the most disruptive moments in the recent history of the Clarity Act occurred in mid-January 2026, when Coinbase abruptly withdrew its support for the Senate version of the bill. This move forced the Senate Banking Committee to cancel a scheduled markup session—essentially the final voting procedure on amendments before the bill's advancement.
Coinbase CEO Brian Armstrong made his position clear: he would prefer the bill not pass at all than to accept a bad bill. In his view, the yield ban is precisely a “bad bill.” He believes that rewards and staking incentives are crucial revenue sources for exchanges, and the legislative language targeting these programs is more about protecting bank profit margins than consumer protection.
Coinbase is not alone in this regard. Kraken, Circle, and other crypto companies have pointed out specific provisions that threaten their operations. One of the most controversial provisions is subclause 505(e)(2), which would prevent the SEC from granting exemptions to companies wishing to migrate traditional equity onto the blockchain. Critics argue that this clause would freeze an entire category of financial innovation and could leave the US lagging behind before the EU's MiCA framework is launched.
Decentralized finance (DeFi News) developers have also expressed similar concerns. Reports indicate that the Senate version of the bill extends the requirements of the Bank Secrecy Act (BSA) to decentralized protocols, effectively requiring “intermediaries” that do not actually control user funds to collect personal data. Developers argue that this is technically unfeasible for true decentralized protocols.