Coinbase urges narrow GENIUS Act scope to issuers only

Coinbase urged the U.S. Treasury this week to interpret and implement the GENIUS Act narrowly, saying regulators should stick to Congress's language and limit any ban on stablecoin interest payments to issuers rather than extending it to exchanges and other nonissuers. The comments, submitted in response to the Treasury's advance notice of proposed rulemaking and filed as the public comment period closed Tuesday, frame a key dispute over how federal rules will shape the stablecoin market.

Coinbase said broad regulatory expansion beyond the statute's text would risk slowing innovation and ceding competitive ground to foreign markets. The company asked the Treasury to exclude nonfinancial software developers, blockchain validators and open source protocols from the law's scope, arguing these actors do not issue payment stablecoins and therefore should not be regulated as issuers. Coinbase also proposed that payment stablecoins be treated as cash equivalents for tax and accounting purposes to simplify compliance and encourage wider adoption.

Faryar Shirzad, Coinbase's chief policy officer, said in a post on X that "GENIUS is landmark legislation designed to make the U.S. the...