Coinbase Seeks Protect Stablecoin Revenue as Genius Act Rulemaking Looms
Coinbase lobbying: what’s at stake
Coinbase has stepped up direct engagement in Washington to secure a revenue line tied to tokenized dollars as regulators and lawmakers parse implementation of the new stablecoin statute. The company treats the statute’s enactment as the opening, not the finish line: the drafting and interpretive guidance that follow will determine whether Coinbase can capture merchant payment flows and intermediation fees.
Bloomberg Intelligence’s modeling places a wide range on outcomes: under scenarios where token use for payments expands, the forecasted stablecoin receipts could grow two- to seven-fold, converting a mid‑decade revenue slice into a potential core transaction business. That projection helps explain Coinbase’s urgency in lobbying — small differences in custody, settlement finality and permissible counterparty roles will change who earns routing and processing economics.
The policy process is congested and procedurally fraught. Committee markups have been paused or rescheduled as negotiators haggle over clause-level language, and the White House has convened banks, exchanges and trade groups to seek technical compromises. Negotiators are weighing procedural levers — including proposals to condition effective dates on agency quorums — that could extend or compress the window for binding rule design.
Pushback from incumbent banks is a material part of the political landscape. Coinbase CEO Brian Armstrong’s recent outreach — including at global forums — encountered sharp objections from some bank executives worried that yield-like features on stablecoins could siphon deposits and compress net interest margins, especially at regional institutions. Those concerns are motivating bank-led proposals that would channel tokenized activity through regulated balance sheets or constrain reward mechanisms.
At the same time, Coinbase is advancing operational work: the company is testing Flipcash-developed, dollar‑pegged token primitives and a branded stablecoin capability that would mint tokens collateralized by USDC for business customers. That pilot is currently internal and limited to exchange infrastructure, but it signals a commercial play to monetize custody, settlement and distribution if regulatory gates permit such products.
Operational details are decisive: custody segregation, redemption guarantees, AML throughput and settlement confirmation rules are technical frictions that will determine merchant onboarding speed and per-transaction economics. Regulators’ choices on these points can either enable lower-cost token rails that displace portions of interchange and network fees or preserve incumbent fee pools by imposing tighter supervisory constraints.
International comparisons matter. Europe’s MiCA architecture is creating clearer licensing and passporting paths that nudge some projects toward jurisdictions with explicit authorization routes, while U.S. proposals emphasize a legal perimeter between payment instruments and investment products and focus on limiting routine yield-for-holding that could resemble uninsured deposits. That divergence makes cross-border issuance and redemption mechanics an additional source of market stress and regulatory arbitrage.
Market participants are responding: some firms have paused large rollouts pending statutory clarity, while well‑capitalized incumbents press ahead with bank-linked token offerings. Investors and partners are parsing comment letters, convenings and internal pilots for signals about merchant adoption velocity, and those readings will feed investment and partnership decisions that either accelerate or stall a wider payments migration to token rails.
In short, Coinbase’s Capitol Hill push and parallel product tests reflect a two-front strategy: influence implementation language during a narrow 6–12 month drafting window and validate operational primitives so the firm can move quickly if rules permit. The intersection of bank resistance, interagency coordination questions and product-level counterparty exposure — notably reliance on USDC custody in white‑label models — makes the near-term outcome highly path-dependent.
The next tranche of rulemaking and guidance will therefore determine whether Coinbase captures a disproportionate share of transactional economics or remains limited to a smaller, more regulated role in tokenized payments.
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