SS #67 - Coinbase and White House Clash Over Stablecoin Bill

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Tensions are rising in Washington as the White House reportedly weighs withdrawing its support for the CLARITY Act following a public fallout with Coinbase. The standoff began after CEO Brian Armstrong pulled his backing for the bill, a move administration officials reportedly labeled a "rug pull" against both the White House and the crypto industry. Armstrong is now defending the decision, arguing that the legislation's current form, particularly its restrictions on stablecoin rewards, would ultimately do more harm than good for the ecosystem.

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In Today's Edition:

• Headline: Coinbase and White House Clash Over Stablecoin Bill

• Quick Bites: Bermuda Teams up With Coinbase and Circle

• Yield of the Week: 40.67% APY on Contango

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HEADLINE

Coinbase and White House Clash Over Stablecoin Bill

State of play: The Clarity for Payments Stablecoins Act has hit a major legislative roadblock as Coinbase withdrew its support, leading the White House to reportedly threaten a total withdrawal of its backing for the bill.

• The primary point of contention is a provision that would effectively ban stablecoin issuers and exchanges from sharing yield or "rewards" with users.

• Traditional banks are lobbying heavily for these restrictions, fearing that yield-bearing stablecoins will drain deposits from traditional savings accounts.

• The Senate Banking Committee has postponed its markup of the bill indefinitely while Coinbase attempts to negotiate a compromise between the crypto industry and the banking sector.

What’s Next: Expect a brief, high-pressure negotiation window where Coinbase attempts to broker a "carve-out" for rewards. If no middle ground is found, the bill will likely be shelved, extending the era of US regulatory uncertainty through the next election cycle.

Why it Matters: This is a fight for the utility of digital dollars. A yield ban would handicap US-regulated stablecoins against offshore competitors, potentially driving innovation out of the country and forcing users into riskier, unregulated yields.

Our Take: Coinbase is right to hold the line: a bill that lobotomizes stablecoin utility to protect legacy banks isn't progress, it's protectionism. The industry should prepare for continued "regulation by enforcement" while exploring non-yield incentives (like loyalty points) to remain competitive.

QUICK BITES

• Bermuda teams up with Coinbase and Circle.

• Gusto taps Zerohash to speed up global payouts with stablecoins.

• Citrea unveils U.S. Treasury-backed stablecoin for its Bitcoin ecosystem.

• Crypto card spending hits $18B annualized as stablecoin use shifts to everyday payments.

• PNC Bank CEO says stablecoins must choose: be a payment tool or a money market fund.

• India's central bank proposes a plan to create digital-currency link among BRICS nations.

• Interactive Brokers unlocks 24/7 funding with USDC, plans to rollout Ripple and PayPal stablecoins next week.

YIELD OF THE WEEK

Midas mHYPER: 12.67% APY

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• Incentives from sources like USDai, CAP, and Neutrl are converted and redistributed as mHYPER to holders and DeFi participants on a best-effort basis.

Contango mHYPER/USDC on Morpho: up to 40.67% APY

• Contango allows users to access up to 6.19x leverage on mHYPER/USDC through the Contango UI via Morpho.

• The platform supports deposits in a variety of assets, allowing users to enter the strategy without being restricted to mHYPER.

• A service fee applies to any adjustments made to position sizes when using the Contango interface.

Loopscale sHYUSD/USDC: up to 20.04% APY

• Loops by Loopscale offer one-click access to leveraged positions (up to 3.9x) on yield-bearing assets like sHYUSD by borrowing USDC to increase exposure.

• Positions generate returns when the asset's yield exceeds the borrowing cost of the fixed-rate USDC loan.

• Users can close positions at any time by swapping the asset back to USDC to repay the debt, retaining the remaining balance as profit.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.