Coinbase's Chief Legal Officer Paul Grewal has informed lawmakers that they cannot support the CLARITY Act while opposing crypto rewards. His public statement comes at a time when Senate stablecoin yield negotiations are at a critical stage.

Opposition was presented in a public message on the X platform. Grewal described the discussion as a binary choice for lawmakers considering the Tillis-Alsobrooks yield compromise.

Banks and cryptos are debating stablecoin yields

The Senate proposal from Thom Tillis and Angela Alsobrooks would prohibit passive yields on stablecoin balances. Only a limited, activity-based reward would be allowed for payments, transfers, or platform usage. Banking groups have lobbied for even stricter limitations. They argue that fees on unused balances could cause deposits to shift away from traditional banks.

Grewal has dismissed the claim of a deposit flight for months, considering it theoretical without data support. A recent release from the U.S. Council of Economic Advisers supported Grewal's view. According to the report, banning stablecoin yields would only increase bank lending by 0.02%.

The stablecoin business generated about 19% of Coinbase's revenue in 2025, according to Bloomberg Intelligence. The final text of the law is financially significant for both the exchange and its largest competitors.

Legislation is urgent

Senator Cynthia Lummis has warned that the bill could be pushed to 2030 if it does not make it by the midterms. The Senate Banking Committee removed the bill from its agenda on April 20. The decision has reinforced fears that the window of opportunity is closing quickly.

Grewal's latest statement sharpens political consideration for those senators who have not yet made their decision. The current compromise forces a choice between banking sector lobbying and the crypto sector – the crypto industry considers activity-based rewards an absolute minimum.

Ultimately, it will determine whether this minimum remains in committee consideration – and affect whether the CLARITY Act passes the Senate in 2026.