Cryptocurrency exchange Coinbase has formally asked the U.S. Department of the Treasury to clarify the implementation of the GENIUS law, warning that overly broad regulation could hinder innovation and reduce the competitiveness of American stablecoins globally.
In its official response, Coinbase recommended that non-financial software, blockchain validators, and open protocols be excluded from the law’s scope. The company emphasized that prohibitions on interest payments should apply only to stablecoin issuers. According to Farjar Shirzad, Coinbase’s Director of Policy, the regulatory framework should support the global adoption of U.S. stablecoins as a payment instrument while maintaining fair competition.
Coinbase also highlighted that exchanges or intermediaries offering reward programs or loyalty incentives should remain outside the law’s reach. Expansive interpretations of the term “interest,” the company argued, would misrepresent the intent and spirit of the legislation. Rewards received from third parties, Coinbase stated, should not be treated as violations.
The firm further recommended treating payment stablecoins as equivalent to cash for accounting and tax purposes, reflecting their real-world usage as stable digital currencies.
Signed into law in July 2025, GENIUS introduced federal oversight for the stablecoin market in the United States. It requires that issued tokens be fully backed by liquid assets, mandates annual audits for issuers, and sets rules for overseas token issuance.
Coinbase urged regulators to adhere closely to Congress’s original intent, building a framework that fosters innovation within the law rather than in opposition to it.
Previously, Senator Elizabeth Warren criticized the GENIUS bill, arguing that it created a “soft regulatory structure” for crypto banks.
