Coinbase CLO Grewal Backs Clarity Act in Bank Standoff

• Grewal says delays on the Clarity Act threaten U.S. competitiveness as banks resist stablecoin reward provisions.

• He argues stablecoins strengthen the dollar, are fully backed by Treasuries, and do not drain community bank deposits.

• Grewal says Clarity would bring federal oversight, define SEC and CFTC roles, and cover spot markets and DeFi.

Paul Grewal, Coinbase’s chief legal officer, said U.S. lawmakers face urgency on crypto market structure rules. He spoke after White House meetings involving crypto executives and banking groups. The talks focused on the stalled Clarity Act, stablecoin rewards, and concerns that delayed legislation could weaken U.S. economic leadership.

White House Meetings and Legislative Focus

According to Paul Grewal, White House officials met with crypto industry leaders and bank associations yesterday. The goal was to break a Senate stalemate delaying the Clarity Act. Participants described the discussions as constructive. However, crypto representatives reported that bank groups engaged slowly.

The central dispute involves stablecoin rewards. Banks oppose allowing crypto platforms to offer rewards on stablecoins held by customers. They argue such rewards could move deposits out of traditional banks. Crypto firms counter that the bill should permit these incentives.

President Donald Trump addressed the issue in the Oval Office. He said he supports the Clarity Act. He added that failure to act could allow China to lead global crypto development.

Grewal on Competition and Stablecoin Rewards

Grewal said the debate centers on competition rather than financial stability. According to him, there is no evidence that stablecoins drain community bank deposits. He said stablecoins support demand for U.S. dollars and help reinforce the dollar’s global role.

He also addressed claims about regulatory imbalance. Grewal said crypto companies seek clear oversight, not avoidance. He noted that stablecoin deposits are backed dollar for dollar by short-term U.S. Treasuries. He contrasted this with the fractional reserve banking system.

Grewal added that bank lobbyists hold over $3 trillion at the Federal Reserve. He said that capital could serve broader economic purposes.

Coinbase Strategy and Regulatory Oversight

During the interview, Grewal discussed Coinbase’s expanding product lineup. He referenced stock trading, prediction markets, derivatives, and direct deposit features. He said Coinbase follows customer demand for integrated financial services.

He also responded to criticism about regulation. Grewal said the Clarity Act would place crypto markets under federal supervision. He added that the legislation would define regulatory roles between the SEC and CFTC.Regarding stablecoins, Grewal noted the Genius Act already permits rewards. He said Clarity would extend oversight beyond stablecoins to spot markets and DeFi. Coinbase is scheduled to report fourth-quarter earnings on February 12.