TLDR
- Coinbase says GENIUS Act rules must follow the statute and avoid regulatory overreach.
- The exchange asks Treasury to exclude non financial software and validators from the law.
- Coinbase says only stablecoin issuers fall under the Act’s interest payment limits.
- The company urges stablecoins to be treated as cash equivalents for tax purposes.
Lawmakers and regulators are preparing for the next stage of U.S. stablecoin oversight as the Treasury begins shaping rules for the GENIUS Act. Coinbase has asked the agency to follow the law as written and avoid expanding its scope. The company’s comments have gained attention across the digital asset sector, since the new rules will guide how stablecoins are issued, used, and supervised across the country.
Coinbase Calls for Precise and Limited Rulemaking
Coinbase submitted detailed feedback to the Treasury on how it should build the GENIUS Act rules. The exchange said the agency must stay within the limits set by Congress and avoid adding new requirements. It warned that rules outside the statute may slow software developers and affect the growth of U.S. digital asset markets.
The company also said that the law was created to support innovation while creating a clear structure. Coinbase Chief Policy Officer Faryar Shirzad wrote on X that the regulations “must stick to the clear intent of the bill text.” He also said that U.S. stablecoins must have enough flexibility to compete with global digital payment tools.
Coinbase added that non-financial software should not be included in the Act’s scope. It said that open-source developers, validators, and protocol builders are not financial entities and should not face rules meant for stablecoin issuers.
Concerns About Interest Restrictions and Rewards Programs
Coinbase raised concerns about how the Treasury may interpret the Act’s restrictions on interest. The law prohibits stablecoin issuers from offering interest. Coinbase said this rule does not apply to exchanges or platforms that give users rewards or loyalty points. It added that cashback or promotional tools should not be treated as interest.
The company said that changing the interpretation would alter the law’s structure. It noted that Congress made clear which entities are restricted. “Treating third-party rewards or loyalty programs as prohibited ‘interest’ would rewrite Congress’s carefully-drawn lines,” the company said.
Coinbase argued that these programs help users make everyday payments and are not financial products. It said these tools do not act like savings accounts and should not be regulated as such.
Tax and Accounting Rules for Payment Stablecoins
Coinbase also urged federal agencies to treat payment stablecoins as cash equivalents for tax and accounting purposes. It said stablecoins are meant to mirror the stability of fiat currency and should be taxed in a straightforward way.
The company added that the Treasury and the IRS should take a “pragmatic, low-burden approach” when establishing tax rules. It said that complex models may raise costs for users and businesses. It also noted that simple rules could support adoption while keeping the system aligned with the statute.
GENIUS Act Creates Federal Stablecoin Framework
The GENIUS Act became law in July 2025 and created a federal framework for stablecoin regulation. The law requires issuers to back their tokens with cash or liquid assets and undergo yearly audits. It also creates guardrails for stablecoins issued outside the U.S.
The Treasury is now developing detailed rules so issuers and platforms can comply. Coinbase said these rules must reflect Congress’s intent and support safe use of payment stablecoins across the U.S. market.
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