Coinbase urges narrow GENIUS Act rules for stablecoins
Coinbase has urged the U.S. Treasury to implement the GENIUS Act in line with congressional intent, focusing regulation solely on stablecoin issuers. The exchange warns broad application of the GENIUS Act to non-financial software, blockchain validators or open-source protocols could stifle digital finance innovation. Since the Act’s July 2025 enactment, all stablecoins must maintain full asset backing and undergo annual audits. Clear GENIUS Act guidance would also help traders and issuers assess compliance risks more accurately.
Coinbase recommends excluding non-financial software developers, blockchain validators and open protocols from compliance, limiting the ban on interest payments to stablecoin issuers only, and treating payment stablecoins as cash equivalents for tax and accounting purposes. It cautions that an overly broad definition of “interest” risks distorting legislative intent and weakening U.S. competitiveness in the global stablecoin market.
Bullish
By calling for precise GENIUS Act guidance and narrowed regulation, Coinbase reduces legal uncertainty for stablecoin issuers, easing compliance burden and promoting innovation. Excluding non-financial software, validators and open protocols from scope limits overreach and safeguards growth in the stablecoin market. Clear rules on interest payments and cash-equivalent treatment of payment stablecoins will likely boost market confidence, improve liquidity and enhance U.S. competitiveness, driving a bullish outlook for stablecoins in both the short and long term.