Coinbase Challenges Banks Over Stablecoin Rewards in CLARITY Act
Coinbase's chief policy officer, Faryar Shirzad, has pushed back against concerns from the American Bankers Association (ABA) over stablecoin rewards in the CLARITY Act.
The ABA wants to change a provision in the bill that would prohibit rewards resembling interest on stablecoin balances. However, Shirzad argued that available data does not support claims that such rewards would drain deposits from community banks or reduce local lending.
He pointed out that community bank deposits grew 26%, or about $482 billion, between June 2019 and March 2026 despite the expansion of stablecoins and related reward programs. Shirzad also referenced empirical studies from Charles River Associates and the Council of Economic Advisers that found no significant relationship between stablecoins and bank deposits.
The CLARITY Act would grant banks broad new statutory authorities in digital assets, including powers related to custody, staking, lending, payments, clearing, and market-making. Shirzad argued that community banks stand to gain particularly from shared blockchain infrastructure, which could allow smaller institutions to compete on global payments while continuing to underwrite local businesses and mortgages.