Stablecoin Rewards Remain Unregulated After CLARITY Act Fails
The failure of the CLARITY Act on September 15, 2026, left stablecoin rewards unregulated and continuing to operate without a cap. These rewards are interest-like payments offered for holding dollar-pegged tokens such as USDC. Despite this regulatory development, neither Coinbase (NASDAQ:COIN) nor Circle Internet Group (NYSE:CRCL) saw significant stock gains following the bill's defeat. Circle’s $76.5 billion in circulating USDC earned reserve income of $668 million during Q2 2026, with a portion passed on to Coinbase and then distributed as user rewards. However, higher Federal Reserve interest rates are also reducing overall crypto trading volumes while increasing the yield from reserves. The upcoming GENIUS Act aims to ban issuer-paid stablecoin interest starting in January 2027, but bank lobbyists continue efforts to close loopholes that allow exchanges like Coinbase to pass through these rewards. Banks oppose such practices due to concerns over competition with traditional checking accounts.
Topics: Circle (CRCL) CLARITY Act Coinbase revenue Fed rates stablecoins USDC