Senate Markup: The $247M Bet on Stablecoin Rewards

The immediate catalyst is a formal Senate committee session. The Banking Committee will meet in executive session on Thursday, January 15, 2026 to consider the Digital Asset Market Clarity Act. This is a binary event: the markup will determine whether the bill advances to the full Senate floor for a vote or stalls.

The bill's core aim is to establish a clear regulatory framework by granting the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over digital commodity spot markets. This is the central structural change the legislation seeks.

Analysts at Bernstein frame the urgency starkly. They argue the window to pass a market structure bill is "here and now," warning that unresolved disputes over stablecoin rewards could derail the entire process. The key obstacle is a standoff between banks and crypto platforms over whether exchanges should be allowed to offer yield-like rewards on stablecoin balances. For all the technical debates on token classification, Bernstein says the bill's fate hinges on this specific, contentious issue.

The Core Conflict: $247M at Stake for Coinbase

The standoff over stablecoin rewards is not a theoretical debate. For Coinbase, it is a direct financial threat. The company has made it clear that limits on these incentives could be a deal-breaker for its support of the Senate bill. The stakes are concrete: in the most recent quarter, Coinbase generated nearly $247 million from stablecoin-related activities. This revenue stream, tied to products like its 3.5% rewards on USDC balances, is a core pillar of its business model.

Coinbase's stance is firm. According to sources, the exchange may reconsider its support for the digital-asset market-structure bill if the final text includes anything beyond enhanced disclosure requirements for rewards. The company is pushing to preserve platform-based rewards as a viable model, warning that broader restrictions could upend competition. This isn't just about a single product; it's about a fundamental business model that provides a steady revenue stream, especially during volatile market periods.

The conflict pits two powerful sectors against each other. Banks argue that yield-bearing stablecoin accounts could siphon deposits away from traditional institutions, creating a competitive imbalance. Crypto firms, led by Coinbase, see these rewards as essential for user engagement and a key driver of their own business models. As Bernstein analysts noted, this is the central obstacle to passing the bill, with the dispute over rewards now taking center stage over more technical questions of token classification.

The bottom line is that hundreds of millions of dollars in revenue are on the line. For Coinbase, the immediate risk is a direct hit to its quarterly earnings if the bill restricts its ability to offer these incentives. The company's willingness to withdraw support adds significant political weight to its position, turning a regulatory debate into a high-stakes negotiation over the future of crypto finance.

Market Reaction and Immediate Scenarios

The market is pricing in high uncertainty ahead of the vote. Coinbase stock is trading around $239 in pre-market, down 0.52%, a muted move that reflects the tension between potential regulatory relief and the looming threat of a deal-breaker. Retail sentiment has already cooled, dropping from 'bullish' to 'neutral' territory, signaling a wait-and-see stance as the clock ticks down to Thursday's markup.

The immediate scenarios are starkly binary, hinging on the committee's handling of the stablecoin rewards conflict. A positive outcome, with banking concerns resolved and the bill advancing with platform-based rewards intact, would likely provide a catalyst for the stock. This would unlock the bill's momentum, removing a major overhang and supporting the broader crypto narrative. The recent report that President Donald Trump reportedly wants to remove taxes on Bitcoin and other crypto transactions adds a layer of potential tailwind, positioning the U.S. as a more competitive jurisdiction. In this scenario, the stock could see a relief rally, with the focus shifting to the next legislative hurdle.

The negative scenario is more straightforward and carries clear downside risk. If the markup includes restrictive language on stablecoin rewards, it would directly threaten Coinbase's nearly $247 million in quarterly revenue from these products. This could trigger a sell-off not just in Coinbase, but across the crypto sector, as the bill's viability as a market structure solution comes into question. The high-stakes nature of the vote is underscored by the fact that January 15 is a critical inflection point that will determine whether the bill gains momentum or faces further delays. For now, the market is holding its breath, with the pre-market action showing a clear aversion to risk ahead of a decision that could reshape the industry's regulatory landscape.