Coinbase asks the US Treasury Department to limit the scope of the GENIUS Act
Date: 2025-11-07 Author: Oliver Abernathy Categories: BUSINESS
US-based crypto exchange Coinbase has submitted an official response to the US Treasury Department proposing adjustments to the implementation of the GENIUS Act. The company expressed concern that an overly broad interpretation of its provisions could hinder innovation and undermine US leadership in the digital asset space.
According to Coinbase, the primary goal of the act is to strengthen the country's position in the global financial arena, not to restrict the activities of tech companies. Chief Policy Officer Faryar Shirzad emphasized that regulation should encourage the use of US stablecoins in global settlements and support their sustainability, rather than create barriers to growth.
In its submission, Coinbase proposed exempting non-financial software, blockchain validators, and open protocols from regulation. The company noted that such elements do not perform financial functions and should not be subject to GENIUS requirements. The exchange also insists that the ban on interest accrual should apply exclusively to stablecoin issuers, not to intermediaries offering bonus or loyalty programs to users.
Coinbase expressed concern that an overly broad definition of "interest" could distort the law's meaning. The company believes that fees paid by third-party partners should not be considered a violation, as they are not directly related to the issuance of stablecoins.
The review specifically addresses tax accounting. Coinbase proposed classifying payment stablecoins as cash equivalents for accounting and tax purposes. This approach, the company believes, will accurately reflect their actual use as a digital equivalent of fiat currencies.
The GENIUS Act, signed into law in the summer of 2025, became the first federal law regulating the stablecoin market in the United States. The document calls for full backing of tokens with liquid assets, mandatory annual audits of issuers, and regulations for international issuances.
Coinbase calls on the Treasury Department to strictly adhere to the spirit of the law and the intent of Congress. The company believes that effective regulation should support innovation and create a secure infrastructure, not restrict technological progress.
Earlier, Democratic Senator Elizabeth Warren criticized the bill, claiming that GENIUS provides an overly lenient regime for crypto banks and could weaken oversight of risky financial institutions.
