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Coinbase has urged the US Treasury Division to stay to Congress’s imaginative and prescient for the GENIUS Act, suggesting that caving in to strain from conventional monetary establishments may stifle stablecoin innovation.
In its response to the Treasury’s request for feedback, Coinbase stated regulators should keep away from “imposing any necessities that transcend what the statute instructions.”
It argued that Congress “rigorously drafted” the GENIUS Act to advertise accountable development in stablecoins, strengthen US crypto management, and modernize funds infrastructure.
Banking teams have referred to as on regulators to shut what they view as a “yield loophole” that permits corporations like Coinbase to supply returns on Circle’s USDC holdings via third events.
Coinbase says that increasing the ban on stablecoin yields would “rewrite Congress’s carefully-drawn traces,” hurting customers and curbing innovation by eradicating market incentives that decrease prices and drive adoption.
The change additionally urged Treasury to coordinate with different regulators to keep away from overlapping guidelines that might fragment the market.
“GENIUS is amongst a handful of federal efforts to supply readability in digital asset markets, so Treasury have to be conscious to not battle with ongoing efforts of Congress or different federal regulators,” Coinbase wrote.
We submitted @coinbase‘s response to @USTreasury‘s request for feedback on the implementation of the GENIUS Act. Our message is easy: GENIUS is landmark laws designed to make the US the undisputed world chief in crypto and stablecoins. To make that occur, the… pic.twitter.com/XLyq15u0Ov
— Faryar Shirzad 🛡️ (@faryarshirzad) November 5, 2025
Banking Foyer Teams Sad Stablecoin Corporations Are Circumventing Yield Ban
The GENIUS Act offered the digital asset market with some long-awaited regulatory readability. It establishes a regulatory framework for stablecoin corporations trying to subject their tokens within the US, and focuses on classifying “cost stablecoins,” how they could be regulated, and who might subject them.
One of many fundamental necessities listed within the GENIUS Act is that permitted issuers keep a 100% reserve backing of excellent stablecoins with extremely liquid belongings comparable to US {dollars} or short-term US Treasuries. The corporations additionally want to supply month-to-month disclosures of reserve composition, in addition to annual audited monetary statements.
There’s additionally a ban on stablecoin corporations providing their token holders yield instantly, however this prohibition has not been expanded to 3rd events or associates.
That, in response to banking foyer teams, paves the way in which for stablecoin corporations to get across the ban, as has been the case with Coinbase providing a yield on USDC.
Coinbase USDC yield providing (Supply: Coinbase)
Regulators In Different Elements Of The World Working On Stablecoin Regulation
Because the US Treasury Division seems to be to implement the GENIUS Act, regulators from different elements of the world have signalled that they’re engaged on their very own regulatory frameworks for stablecoins.
Canada just lately unveiled plans for a stablecoin regulatory framework in its 2025 federal funds. Much like the GENIUS Act, Canada’s framework would require stablecoin corporations to take care of enough reserves.
In the meantime, Financial institution of England Deputy Governor Sarah Breeden just lately stated she expects the UK to maintain tempo with the US in relation to regulating the $306 billion stablecoin market.
Stablecoin market cap (Supply: DefiLlama)
She additionally careworn the significance of the US and UK synchronizing in relation to regulating the rapidly-growing sector. The Financial institution of England is reportedly anticipated to subject its stablecoin session paper on Nov. 10 as effectively after talking with US authorities and companies.
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