Why does the same bill only target Coinbase?

Writing by Fang Dao

Amid the latest discussions around the U.S. “Clarity Act,” a notable market divergence has emerged.

Coinbase faces potential impacts, while Robinhood and Circle are relatively less affected.

Despite the same regulatory direction, the market outcomes differ, not because of “individual company issues,” but because:

Different business models have varying sensitivities to the same rules.

The core of this controversy revolves around the “yield mechanism” of stablecoins.

Under the current proposed regulations, authorities may restrict platforms from offering “passive yields” to stablecoin holders, similar to bank deposit interest. This change directly affects a key growth path for centralized trading platforms:

Using yields to attract user funds and encourage deposits.

In the existing system, the operation of stablecoins is straightforward. Issuers invest reserve funds in low-risk assets like U.S. Treasuries to earn interest; distribution platforms then share part of these earnings with users to boost user engagement and fund volume.

This structure is essentially a simplified version of a net interest margin model.

For Coinbase, this is especially critical.

In recent years, interest income has increasingly contributed to its overall revenue, with stablecoin-related earnings becoming a high-margin source. Therefore, if “yield distribution” is restricted, the impact will not only reduce user attraction but also directly threaten its profit structure.

This is the fundamental reason behind the market’s sharp financial reaction. Because once yield sharing is cut off,

Stablecoins revert from “interest-earning assets” to “pure fuel.”

In contrast, Circle does not directly distribute yields to users; its main income comes from the interest spread on reserve assets. Under this regulation, its risk exposure is relatively limited, and it might even benefit during reallocation of funds.

Robinhood, meanwhile, does not heavily rely on stablecoin yield products, making it less sensitive to this change in the short term.

This divergence reveals a deeper underlying shift.

From an institutional perspective, this is not just about business differences but a redefinition of value chain positioning:

Coinbase loses its retail liquidity “hook,” while Circle consolidates its institutional clearing “moat.”

Furthermore, the essence of this dispute is not about stablecoins themselves but whether they are exercising the core privileges of the banking system—

The fundamental debate over stablecoins is not about who issues them but whether they are exercising “banking privileges.”

Once stablecoins acquire “bank-like deposit” attributes, they inevitably fall within regulatory boundaries.

From a broader perspective, the significance of this regulatory wave is not merely about restricting certain products but:

Reducing the “regulatory arbitrage” space in the crypto industry.

In recent years, some platforms used stablecoin yield mechanisms to build a “quasi-deposit system” outside traditional financial regulation, attracting funds with fewer constraints.

As rules become clearer, the market is undergoing a re-pricing:

The market’s valuation of the “Clarity Act” essentially reflects a systemic reset of “regulatory arbitrage” opportunities.

However, it’s important to note that this regulation has not yet been finalized.

The current controversy centers on how to define “passive yields” versus “behavior-based incentives.” If reward mechanisms based on trading, usage, or participation are permitted, platforms may still maintain user attraction through structural adjustments.

Business models will be compressed but not eliminated.

From a longer-term perspective, the significance of this event lies not in short-term fluctuations but in a deeper structural change:

Stablecoins are being integrated into the traditional financial system.

This raises a more critical question: when stablecoins lose their “deposit-raising” capability, what do they have left?

The answer might be simpler than expected:

They will become the most efficient global settlement “stamps” in human history.

And on a macro level:

The wild growth phase of the crypto industry has ended, replaced by a scenario where it “dances with shackles” within the confines of traditional finance.

References

Needham Research on the Clarity Act Analysis

Stablecoin interest spread models and reserve structures

Industry public data