Coinbase Urges Treasury to Adhere to GENIUS Act’s Legislative Boundaries

• Coinbase warns Treasury against overreach in GENIUS Act implementation.
• Exchange urges fair tax treatment for payment stablecoins as cash equivalents.
• Balanced regulations seen as key to sustaining U.S. crypto innovation.

Coinbase Global has called on the U.S. Treasury Department to maintain a strict interpretation of the GENIUS Act while drafting its regulatory framework. The crypto exchange emphasized that any attempt to extend the law’s scope beyond Congress’s intent could disrupt innovation and hinder the growth of the U.S. digital asset industry.

According to Faryar Shirzad, the implementing regulations must reflect the clear intent of the bill and strengthen the role of U.S.-issued stablecoins in global finance. He explained that regulators should ensure these assets maintain the flexibility and competitiveness needed to become a leading payment and settlement tool worldwide.

Besides that, Coinbase argued that the Treasury must exclude entities like blockchain validators, open-source protocols, and non-financial software providers from the GENIUS Act’s scope. The company noted that the law’s prohibition on interest payments applies solely to stablecoin issuers. Extending that restriction to intermediaries or exchanges offering loyalty programs, it said, would contradict the law’s wording and purpose.

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Coinbase Pushes for Practical Rules on Tax and Accounting

Moreover, Coinbase urged the Treasury and the Internal Revenue Service to treat payment stablecoins as cash equivalents for both tax and accounting purposes. The exchange explained that since these assets are designed to replicate the stability of traditional currencies, their tax treatment should mirror that of fiat money. It also encouraged regulators to adopt a practical, low-burden approach to handling tax matters related to stablecoins.

Coinbase believes that establishing reasonable and predictable tax guidelines would support the broader adoption of compliant digital assets. Such clarity, it added, could help position the United States as a global leader in digital finance.

Ensuring Innovation Through Balanced Implementation

Additionally, the company’s submission reiterated its view that clear and balanced implementation of the GENIUS Act would create a more stable environment for developers and investors. Overly restrictive rules, it warned, could undermine the innovation the law seeks to promote.

The GENIUS Act, enacted earlier this year, provides a federal framework for regulating stablecoins. It requires full dollar or liquid asset backing, mandatory annual audits for certain issuers, and detailed standards for foreign-issued stablecoins. Coinbase’s recommendations reflect its ongoing effort to shape policy in a way that supports growth while ensuring regulatory clarity across the crypto ecosystem.

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