Coinbase and PayPal Navigate GENIUS Act Loophole for Stablecoin Rewards

Coinbase and PayPal utilize a regulatory loophole to offer stablecoin rewards, leveraging third-party partnerships amidst 2025 GENIUS Act ban.

Key Points:

Coinbase and PayPal offer platform-based stablecoin rewards.
They leverage partnerships to bypass interest ban.
User acquisition increases under decreased regulatory scrutiny.

Coinbase and PayPal circumvent the GENIUS Act’s stablecoin interest ban by offering reward APYs through platform revenue-sharing agreements with partners Circle and Paxos in the U.S.

This approach highlights strategic legal navigation to maintain competitive offerings, potentially influencing similar platform strategies across the cryptocurrency market.

Coinbase and PayPal continue offering APYs on USDC and PYUSD by structuring them as platform revenue-sharing, despite the expected 2025 ban by the GENIUS Act. This approach sidesteps restrictions imposed on stablecoin interest payments per reports.

Executive teams from Coinbase and PayPal assert they are not stablecoin issuers, claiming rewards are from revenue-sharing with Circle and Paxos. This allows them to navigate the GENIUS Act’s limitations legally. According to Brian Armstrong, CEO of Coinbase, “The reason is to differentiate the platform.“

The offering of 4.1% and 3.7% APYs has led to a boost in user acquisition. Regulatory tolerance has provided comfort amidst potential risks, as indicated by the April 2025 SEC decision on reduced scrutiny.

The availability of these rewards signifies a focus on user growth and market competitiveness. The regulatory workaround has allowed companies to continue offering incentives without classifying them as interest, thus avoiding the need for registration.

This strategy may enable further platforms to replicate this model, using third-party issuers to offer DeFi-like returns while remaining compliant. A shift in regulatory perspective could also see an increase in centralized exchanges offering similar incentives.

贝莱德ETF钱包转入Coinbase 3215枚BTC与3.89万枚ETH｜链上侦探

据 BlockBeats 10 月 23 日消息，链上监测平台 Onchain Lens 追踪到贝莱德旗下 ETF 钱包向 Coinbase 转入 3,215 枚 BTC 和 38,900 枚 ETH。报道援引合计约 3. 5563 亿美元，但未注明估值时点与价格口径，该金额暂视为参考数据而非独立核实结果。