Coinbase Chief Legal Officer Paul Grewal has told lawmakers that they cannot support the CLARITY Act while simultaneously being against crypto rewards. His public call comes as negotiations over stablecoin yield in the Senate reach a critical phase.

His response came via a public post on X. Grewal sees the debate as a choice for lawmakers who are unsure about the Tillis-Alsobrooks compromise proposal on yield.

Banks and crypto clash over stablecoin yield

The Senate proposal from Thom Tillis and Angela Alsobrooks would ban passive yield on stablecoin balances. Only limited rewards based on activity, such as payments, transfers, or platform usage, are allowed. Banking groups have even lobbied for even stricter restrictions. They say that rewards on dormant balances could lead to an outflow of deposits from traditional banks.

Grewal dismisses the argument of deposit flight for months and calls it a theoretical claim without backing in data. A recent report from the White House Council of Economic Advisers agreed with him. According to that report, the ban on stablecoin yield would only increase bank lending by 0.02%.

Approximately 19% of Coinbase's revenue for 2025 comes from stablecoin-related income, according to Bloomberg Intelligence. The final text of the law therefore has financial implications for the exchange and its biggest competitors.

Time for legislation is running out

Senator Cynthia Lummis has warned that the bill could be delayed until 2030 if the deadline for the midterm elections is not met. The Senate Banking Committee has removed the proposal from the agenda of April 20. This has raised concerns that time is running out.

Grewal's latest call makes the political choice for hesitant senators clearer. The current compromise forces a choice between the bank lobby and a crypto sector that sees rewards based on activity as an absolute minimum.

Whether that minimum remains after the discussion in the committee will determine if the CLARITY Act passes through the Senate in 2026.