- Coinbase urges the U.S. Treasury to keep GENIUS Act regulations clear, focused, and innovation-friendly.
- Clear, consistent rules will strengthen U.S. leadership in global digital asset innovation markets.
- Overbroad stablecoin regulations could severely hinder crypto growth, adoption, and overall market development.
Crypto exchange Coinbase Global has called on the U.S. Treasury Department to make sure that regulations based on the GENIUS Act stick as close as possible to what was originally intended by this law. Otherwise, Coinbase argued that innovation could be harmed, and this could negatively impact any attempt by the U.S. to be one of the leading centers of digital currencies worldwide.
By emphasizing clarity and precision, Coinbase aims to help regulators create rules that support the growth and competitiveness of stablecoins while maintaining compliance with congressional objectives.
Also Read: Coinbase Targets $2 Billion BVNK Deal to Lead Global Stablecoin Payments
Coinbase Pushes for Clear Boundaries in Stablecoin Law
Coinbase has proposed a narrow application of this statute in order not to include entities and activities that fall outside of its intended application. Nonfinancial software, blockchain validators, and open-source protocols would be excluded from the application of the GENIUS Act.
Additionally, the group is reminded that any ban on payments of interest should be limited solely to stablecoin issuers and should not be extended to any middleman or trading platform offering any kind of loyalty program or rewards system. Otherwise, Congress’ intention could be clouded and made ineffective by its own act.
Coinbase has also stressed that payments made through stablecoins should be considered as cash equivalents for tax and accounting purposes. Stablecoins are digital currencies that aim to replicate all the characteristics of fiat currencies, and they should be treated as such, including tax treatment and regulations.
If a more practical and light-touch approach is adopted concerning taxation and reporting for stablecoins, this could have a very positive effect on adoption and market efficiency and help secure a more prominent role for the U.S. within the digital asset world. By providing guidance that is consistent with intended use, innovation can be encouraged and compliance issues mitigated.
GENIUS Act Brings Clarity to U.S. Stablecoin Market
The GENIUS Act, passed in July of 2025, establishes a federal framework for stablecoins’ regulation. Under this act, stablecoins have to be fully collateralized by U.S. dollars or equivalent value, and stablecoin issuers have to be audited annually, while some parameters have been provided for foreign-issued stablecoins as well.
Industry input, as exemplified by input from Coinbase, indicates that there is a need for regulations that address consumer issues, innovation, and protecting America’s competitive edge, as its sector is growing at a rapid pace.
Also Read: Coinbase Executive Calls Out Banks for Hindering Crypto Charter Approval
