Coinbase finds itself navigating dual headwinds this week. As cryptocurrency markets experience a notable downturn, the company is simultaneously engaged in a critical Washington D.C. policy battle that could reshape a core part of its business model. The central question before the White House is whether crypto platforms will retain the ability to offer interest or “rewards” on stablecoin holdings. The outcome will directly influence the appeal of dollar-pegged stablecoins to users and determine the intensity of opposition from the traditional banking sector.
A Pivotal Meeting at the White House
According to Reuters, the White House Crypto Council has convened a meeting for Monday, February 2, 2026. Attendees include representatives from Coinbase, major crypto industry groups, and banking organizations. The discussion centers on the proposed market structure legislation known as the Clarity Act.
The contentious issue is how the legislation will treat interest and reward payments that crypto companies provide to customers for holding dollar-denominated stablecoins. For the digital asset industry, these rewards are a key tool for user retention. For banks, however, they represent direct competition for customer deposits.
The Blockchain Association—whose members include Coinbase, Ripple, and Kraken—has confirmed its participation. The Digital Chamber and representatives from the American Bankers Association are also expected to attend.
Stalled Legislation and a CEO’s Rebuke
The fact that the issue has reached the White House underscores the deep political impasse. Coinbase CEO Brian Armstrong publicly withdrew his support for the current draft of the Clarity Act on January 14, 2026. His stated reason was recent amendments that he claimed “would kill stablecoin rewards.”
This move coincided with a legislative slowdown. The Senate Banking Committee postponed its planned markup vote twice. While the Senate Agriculture Committee advanced its portion of the bill on January 29, 2026, it did so without Democratic support.
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The underlying conflict is straightforward: the growth of stablecoins could draw funds away from traditional bank deposits. In a recent analysis, Standard Chartered warned that U.S. banks could lose approximately $500 billion in deposits by the end of 2028 if stablecoins continue their rapid expansion. This concern explains why banking lobbyists are arguing so forcefully against allowing yield on stablecoin holdings.
Share Price Under Pressure
This political uncertainty compounds an already weak trading environment for Coinbase stock. The shares have declined significantly, currently trading at €160.88. This represents a drop of 32.32% over the past 30 days.
Additional pressure stems from two sources. First, a broad-based weakness in the crypto market followed a significant weekend pullback in Bitcoin’s price. Second, the company has faced recent regulatory challenges in other jurisdictions, including a ruling by the UK’s Advertising Standards Agency that classified certain Coinbase advertisements as “irresponsible.”
Key Dates and Facts:
– Monday, February 2, 2026: White House meeting on stablecoin rewards within the Clarity Act
– Participants: Coinbase, Blockchain Association, Digital Chamber, American Bankers Association
– Next Quarterly Report: February 12, 2026
The company’s upcoming earnings report on February 12 will provide the next major milestone for investors. Until then, the market will be watching closely to see if Washington can broker a viable compromise on stablecoin rewards or if the Clarity Act remains deadlocked.
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