Coinbase has called on the U.S. Treasury Department to provide clearer guidance on the implementation of the GENIUS Act, warning that excessive regulation could undermine innovation and weaken the country’s position as a global leader in digital finance. In an official statement, Coinbase’s Director of Policy, Faryar Shirzad, said that new rules should “ensure the competitiveness of U.S. stablecoins and create conditions for their global adoption as a payment instrument.” The exchange cautioned the Treasury against introducing restrictions not explicitly outlined in the law, urging policymakers to focus on innovation rather than limitation. Coinbase’s Recommendations for the GENIUS Framework In its response, Coinbase proposed several key adjustments to the regulatory framework. It suggested that non-financial software developers, blockchain validators, and open protocols be excluded from GENIUS compliance requirements. The company also argued that the ban on interest payments should apply only to stablecoin issuers, not to exchanges or intermediaries offering bonus programs or loyalty rewards. Coinbase emphasized that rewards from third parties should not be considered a violation, warning that a broad definition of “interest” could distort the intent of the legislation. The firm additionally proposed that payment stablecoins be treated as cash equivalents for accounting and tax purposes — a move it said would “reflect their real-world use as stable digital currencies.” The GENIUS Act and Its Impact Signed into law in July 2025, the GENIUS Act marked the first comprehensive federal regulation of the U.S. stablecoin market. The law requires that all stablecoins be fully backed by liquid assets, mandates annual audits for issuers, and sets rules for foreign-issued tokens operating in the U.S. market. Coinbase urged regulators to uphold Congress’s original intent, emphasizing that effective policy should allow innovation to grow within the framework of the law, not in defiance of it. Not all lawmakers share that optimism. Senator Elizabeth Warren, a longtime crypto critic, called the GENIUS Act a “soft regulatory structure for crypto banks,” arguing that it favors industry interests over consumer protections. As discussions between regulators and industry leaders continue, Coinbase’s proposals could shape how the U.S. defines the future of stablecoins and digital finance innovation.
