Coinbase execs back CLARITY bill, defend payment stablecoins

Coinbase Chief Legal Officer Paul Grewal and Chief Policy Officer Faryar Shirzad publicly endorsed the Digital Asset Market CLARITY Act and defended payment stablecoins as the Senate moves toward a floor vote on the bill.

Grewal framed oversight as a risk-management issue and said regulators should focus on how risk, access and supervision are handled rather than on whether money is privately issued. He wrote, “Private money is not inherently riskier than other private services.”

In a separate policy response, Shirzad placed payment stablecoins within the broader U.S. money supply, noting that about 90% of M2 is held in privately issued instruments such as commercial bank deposits and money market fund shares. He contrasted stablecoin issuers with commercial banks, saying banks lend, transform maturities and operate with high leverage, while stablecoin issuers are restricted from lending, using leverage or running fractional reserves.

Both executives cited the GENIUS stablecoin framework enacted last July as an example of specific rules for payment tokens. Under that framework, issuers must back outstanding tokens one-to-one with reserves held in cash and short-dated U.S. Treasuries. The statute bars loans, leverage and fractional-reserve practices for stablecoin issuers, requires monthly reserve attestations and provides on-chain visibility into token balances. Coinbase says those measures increase transparency compared with traditional bank deposits.

The endorsements come as the Senate Banking Committee prepares to advance CLARITY toward a full Senate vote. Industry support at this stage may affect final language in the bill on permitted stablecoin yield and market-structure rules. With two legislative windows remaining before the midterm elections and November approaching, lawmakers must reconcile the Senate bill with the version already passed by the House.

Coinbase has previously urged clearer regulation of digital assets; Grewal and Shirzad presented their comments as part of that ongoing effort. The remaining debate on CLARITY focuses on balancing consumer protections and systemic risk controls with rules that reflect the technical and business differences between stablecoin issuers and traditional banks.