WASHINGTON, May 4, 2026, 09:01 (EDT)
Coinbase stock climbed in U.S. premarket action Monday after the crypto exchange announced a breakthrough on stablecoin rewards—an issue that had blocked the CLARITY Act in the Senate. The new agreement limits bank-style yields on stablecoins but still allows certain rewards linked to genuine platform activity.
Timing is key here—the bill has snapped back onto a May schedule after drifting for months. The CLARITY Act, officially known as the Digital Asset Market Clarity Act of 2025, cleared the House in July and now waits in the Senate Banking Committee. If it advances, the bill would set up a federal rulebook for digital commodities, dividing oversight between the Commodity Futures Trading Commission and, in certain cases, the Securities and Exchange Commission.
Stablecoins are digital tokens, typically pegged to the dollar—usually $1. Coinbase’s USDC page advertises rewards for simply holding USDC, but the help section clarifies: USDC balances aren’t considered bank deposits, and there’s no FDIC or SIPC insurance. That’s exactly the business area banks have been working to limit.
Coinbase’s chief policy officer, Faryar Shirzad, said banks pushed through tighter restrictions, though Coinbase managed to keep incentives linked to “real usage of crypto platforms and networks.” CEO Brian Armstrong, for his part, kept it brief: “Mark it up.” The Edge Malaysia
Sens. Thom Tillis (R., N.C.) and Angela Alsobrooks (D., Md.) put together draft language that would prohibit stablecoin rewards deemed “economically or functionally equivalent” to bank deposit interest. Where that threshold stands—Treasury and the CFTC would sort out specifics in later rulemaking. American Banker
The White House’s latest crypto hint helped fuel the move. At Bitcoin 2026, Patrick Witt—executive director for the President’s Council of Advisors for Digital Assets—told attendees to expect a “big announcement” within weeks regarding the U.S. Strategic Bitcoin Reserve. That reserve was established by March 2025 executive order, tapping government-forfeited bitcoin and instructing Treasury and Commerce to look at budget-neutral expansion options. Bitcoin News
The White House Council of Economic Advisers, in a paper released April 8, said that prohibiting stablecoin yield would push just $2.1 billion—about 0.02%—into bank lending, while consumers could lose roughly $800 million in welfare benefits. The report noted that even the bleakest scenario would need big leaps: a far larger stablecoin universe and an overhaul of the Fed’s monetary policy framework.
Banks push back against that idea. Sayee Srinivasan, chief economist at the American Bankers Association, and Yikai Wang, the group’s vice president for banking and economic research, said the “live policy concern” is about whether yield-paying stablecoins might siphon deposits away from community banks, potentially driving up their funding costs. ABA Banking Journal
Ripple effects weren’t limited to Coinbase. Shares of Circle, the company behind USDC, climbed almost 10% in premarket action. Strategy and Robinhood moved higher, too, as stocks tied to bitcoin strengthened. Bitcoin itself hovered near $78,846, sticking close to $80,000—a level that’s defined the latest crypto bounce.
Coinbase faces a fresh hurdle this week, with first-quarter earnings set to drop after the bell on May 7. Investors are watching for updates on trading and subscription revenue, plus any new details on costs tied to USDC rewards.
The deal hasn’t crossed the finish line yet, and the risk section is substantial. The legislation faces a Senate committee markup, must clear a full Senate vote, then could run into House-Senate reconciliation before it even gets to the White House. Barron’s points out that political infighting over Trump-family crypto stakes, law enforcement pushback, and an election-year clock all threaten to stall—or even derail—the bill.
Monday’s action isn’t the end of the story—just a procedural step. The stablecoin deal carves out a way for Coinbase and other crypto players to preserve elements of their rewards setup. On the other side, banks get language they can cite to push back on deposit-style offerings cropping up outside traditional banking.
