Coinbase and PayPal Exploit Legal Gray Zone to Offer Stablecoin Yields Despite Federal Ban
Main Idea
Coinbase and PayPal are offering stablecoin yield programs despite new US legislation banning such incentives, arguing that they are not the issuers of the stablecoins and thus not subject to the law.
Key Points
1. The GENIUS Act prohibits stablecoin issuers from offering yield incentives, but Coinbase and PayPal continue their programs by claiming they are not the issuers.
2. Coinbase offers 4.1% APY on USDC holdings, stating it provides 'rewards' not 'yield,' and is no longer a formal issuer of USDC.
3. PayPal offers 3.7% annual returns on PYUSD, arguing it is not the issuer as PYUSD is technically issued by Paxos.
4. Both companies defend their programs as key features for user growth, despite regulatory scrutiny.
5. Stablecoins are gaining traction for cost-efficiency, with global remittance fees still high compared to UN targets.
Description
Two of America’s largest crypto-linked companies, Coinbase and PayPal, are pushing forward with stablecoin yield programs, despite new US legislation explicitly banning such incentives for stablecoin issuers. Key Takeaways: Coinbase and PayPal continue offering stablecoin rewards despite a federal ban targeting issuers. Both firms argue they are not subject to the law since they are not the actual stablecoin issuers. Global corporate interest in stablecoins remains strong. The GENIUS Act, signed...
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