Coinbase intensifies pressure on the U.S. Congress, with stablecoin reward provisions becoming a key point of contention in cryptocurrency legislation

According to Bloomberg, Coinbase is increasing pressure on U.S. lawmakers to retain the ability to offer rewards to customers holding stablecoins.

The company believes that if the restrictive provisions currently under discussion are included in the major cryptocurrency bill to be announced on Monday, this business will face risks. Sources say that if the bill includes other content beyond enhanced reward disclosure requirements, Coinbase may reconsider its support for the digital asset market structure bill, which will be reviewed by at least one Senate committee on Thursday.

Industry insiders reveal that the proposed plan is to limit the ability to offer rewards to regulated financial institutions, a move supported by some in the banking sector who believe that interest-bearing stablecoin accounts could siphon off traditional bank deposits. Coinbase has applied for a national trust license, hoping to provide rewards under the regulations.

However, native cryptocurrency companies are pushing to retain a platform-based reward model, which they argue can work even without a trust license, and warn that broader restrictions could disrupt the competitive landscape of the industry. The specific wording of the bill remains unclear, but it will add some provisions regarding rewards, an issue that has weakened bipartisan support for the market structure bill and could delay its passage.

Sources indicate that a potential compromise could allow only licensed financial institutions to offer rewards on stablecoin balances. Recently, five cryptocurrency companies received conditional approval from the U.S. OCC to become national trust banks. Given the recent approvals, a market structure bill allowing licensed trust companies to provide yields may appease some cryptocurrency firms. If restrictions are implemented, industry insiders believe it could trigger a "whack-a-mole" game, with crypto companies seeking alternative ways to reward users.