Coinbase Keeps Stablecoin Rewards After the Clarity Act Fails

Bitwise CIO Matt Hougan says the Senate’s 49 to 50 CLARITY Act cloture failure on Sept. 15 left Coinbase free to keep paying stablecoin rewards.

His Sept. 30 memo on why crypto rallied when Clarity failed put bitcoin up 8% and ether up 7% since the vote, with NEAR up 104% and Uniswap up 49%. The tape looked broad. The legal split underneath was not.

Cloture Failed 49 to 50

The Senate never voted on the Digital Asset Market Clarity Act itself. At 2:19 p.m. on Sept. 15, 2026, it rejected cloture on the motion to proceed to H.R. 3633, recorded as roll call 234. The 49 to 50 cloture vote needed 60 to move. It fell 11 short.

Every yea was Republican. Four Republicans voted nay: Susan Collins of Maine, Josh Hawley of Missouri, Jerry Moran of Kansas, and Thom Tillis of North Carolina. Democrat Chris Coons of Delaware did not vote. Independents Angus King and Bernie Sanders voted nay with the Democrats who were present.

Tillis switched to nay so he could file a motion to reconsider, which leaves a formal path back to the floor. Sen. Cynthia Lummis, the Wyoming Republican who had shepherded the bill, still called it dead that evening and blamed Democrats for a political kill. The industry had spent years pushing a statute. The market that followed priced something else.

THE TWO WEEKS AFTER CLOTURE

1. September 15, 2026: Cloture on the motion to proceed to H.R. 3633 fails 49 to 50 at 2:19 p.m.; Tillis files a motion to reconsider.
2. September 17, 2026: The SEC issues a five-year Innovation Exemption for tokenized NMS stock on permissioned automated market makers.
3. September 25, 2026: SEC staff publish crypto-asset FAQs, including an answer on token buybacks.
4. September 28, 2026: Staff add a no-central-party limit to that buyback answer.
5. September 30, 2026: Hougan publishes the memo arguing the industry traded a law for faster agency rules.

Hougan also logged Avalanche up 43% over that span, a broad-tape move he did not file with the buyback names. Crypto stocks rose with the coins. The argument in the memo is that those prices tracked four groups that escaped bargains written into the dead bill, not a sudden love of uncertainty.

Who Can Pay Stablecoin Rewards Now?

Issuers still cannot pay interest on payment stablecoins under the GENIUS Act. Exchanges still can, because that 2025 statute never named them, and the CLARITY text that would have closed the gap died on the cloture vote.

Hougan writes that banks spent the talks trying to stop platforms such as Coinbase from passing stablecoin income through to customers, and that they refused to back early drafts that allowed even small amounts. They mostly won inside the room. The final Senate text, as he describes it, banned platforms from paying stablecoin interest or yield “in any form,” with penalties up to $5 million per violation.

Crypto sacrificed long-term certainty for better rules, faster. That’s not a bad tradeoff.

Matt Hougan, Chief Investment Officer, Bitwise weekly CIO memo, Sept. 30, 2026

Killing the bill reopened the older statute. GENIUS, signed in July 2025, is still the law that governs issuance. Its issuer ban on stablecoin interest stops a permitted issuer from paying a holder yield solely for holding, using, or keeping the token. It does not, on its face, stop an exchange from running a rewards program on balances it already holds.

WHERE THE YIELD BAN STOPS

• Issuers: GENIUS bars a permitted payment stablecoin issuer from paying interest or yield solely for holding the token.
• Exchanges: The same statute is silent on intermediaries, which is the hole Coinbase and peers still use.
• Dead CLARITY text: The version Hougan cites would have banned platforms from paying that yield in any form.
• The penalty that vanished: Up to $5 million per violation sat in that dead text, not in GENIUS.

Hougan calls that silence a giant opening, with no federal ceiling on the rewards an exchange can post. He also names the loser in one line: banks that would not compromise on a partial allowance now watch stablecoins take deposits without the platform ban they wanted. The same fight produced a push for a Treasury switch on stablecoin yields that would have handed the brake to the Treasury Department instead of leaving it in a market-structure bill. That brake is not law either.

Coinbase’s Morpho Channel Stays Open

Hougan puts Coinbase first among the stablecoin winners because it already uses rewards to pull in customers. The firm does not issue USDC. Circle does. Coinbase sits in the middle as the venue that holds the coins and pays the customer.

Part of that stack is onchain. On Sept. 18, 2025, Morpho said Coinbase had launched USDC lending powered by Morpho, routing deposits through Morpho vaults curated by Steakhouse Financial. Borrowers, including Coinbase users taking USDC loans against bitcoin, pay the interest that lenders earn. Morpho said the related crypto-backed loan book had already originated more than $900 million.

Those products do not need CLARITY. They need GENIUS to stay silent on intermediaries, and they need the SEC and the banking agencies not to treat the payout as issuer yield by another name. Hougan is blunt about the irony: the banks’ hard line, in his telling, now helps every stablecoin take share from deposits that still sit at near-zero rates inside the old system.

That is a customer-acquisition edge, not a new federal charter. It is also the piece of the post-vote map that does not wait on tokenization sandboxes or staff FAQs. The rewards are already on the app.

Established Exchanges Keep the License Slog

The second prize is duller and, for Coinbase and Kraken, just as durable. Hougan says CLARITY would have created a national license for spot crypto exchanges. Today those firms still stitch together state licenses, a grind that keeps the club small and slows a bank or a broker that wants to walk in with a federal ticket.

Without that license, he writes, Coinbase and established competitors such as Kraken keep the moat. A second structural change is now off the table with it. In listed stocks the exchange and the broker are separate businesses. In crypto, one firm often runs both, which is a fat margin. Hougan says the bill would have limited that bridge and raised costs. “Advantage: exchanges,” he wrote.

New entrants are the quiet losers on this column. A national passport was the one provision that would have cut the incumbents down to a filing, not a 50-state tour. Traditional firms that wanted a clean way in lost that on-ramp on the same afternoon the banks lost the yield ban. The incumbents did not need the market to rally for this part of the ledger to clear. They only needed the license not to exist.

A Five-Year Sandbox for Tokenized Stocks

Two days after cloture failed, the SEC stopped waiting for Congress to study the question. On Sept. 17 it issued an Innovation Exemption for tokenized NMS stock, a temporary, conditional order that lets Tokenized Securities Venues run permissioned automated market makers and liquidity pools without registering as exchanges.

Permissioned Pools on Public Chains

Chairman Paul S. Atkins said the Commission was acting “within its statutory authority” to let certain tokenized stocks trade onchain through that exemption while it thinks about further steps. The relief also lifts certain liquidity providers out of the Exchange Act’s dealer definition when they post their own capital in those pools. Both pieces run five-year clocks from publication.

The conditions are tight. Tokenized NMS stocks on a venue face symbol and volume limits. The token has to carry the same rights as the listed share. Before listing a third-party tokenization, the venue must give the issuer written notice and a chance to object. Smart contracts must be auditable, public, and deployed on a public, permissionless ledger, while access to the pool itself stays permissioned. Trading on the venue has to stop when the primary listing exchange stops the underlying stock.

CLARITY, in Hougan’s account, would have told the SEC to study tokenized securities, which in practice meant years of rulemaking. The order trades that study for a sandbox with caps. It is not a permanent market-structure law, and Atkins said as much by inviting comment and talking about later rulemaking. It is still faster than the bill the Senate just refused to debate.

Securitize Is Named as the Main Beneficiary

Hougan picks Securitize as the biggest name in this column, noting it tokenizes funds for BlackRock, Apollo, and KKR and is the transfer agent behind BlackRock’s BUIDL. Direct tokenization shops more broadly catch some of the same tailwind. Synthetics that only track a price, without the shareholder rights the order requires, are outside it.

The two-day gap between the failed cloture vote and the order is hard to read as improvisation. The Commission had the exemption drafted. Congress withheld the statute. The agency used Section 36 authority it already had. People following the vote treated that sequence as the real tell: the Senate can sit on H.R. 3633, and the onchain stock experiment still starts under an order that expires unless someone extends it.

NEAR’s 104% Jump After the Buyback FAQ

The loudest tape after the vote belonged to tokens that spend protocol revenue buying their own supply. Hougan lists Hyperliquid up 15%, NEAR up 104%, Uniswap up 49%, Lighter up 10%, and Pump up 19% from the vote through his Sept. 30 memo. Under CLARITY, he says, a buyback might have shoved a token back toward security status on the way from SEC to CFTC jurisdiction. Nobody could say.

With the bill gone, staff at the Division of Corporation Finance posted FAQs on Sept. 25. Hougan summed the buyback answer this way: once a network is functional, announcing a buyback program does not make its token a security. Three days later, staff narrowed that assurance. The revised answer reaches a functional system that also has no central party, a person, entity, or group with operational, economic, or voting control. Projects that still have a committee deciding the buys sit in a thinner shelter than the Sept. 30 memo describes.

HOUGAN’S POST-VOTE TAPE THROUGH SEPT. 30

That edit is the small version of Hougan’s larger warning. Staff can move a FAQ in a weekend. A statute would have been slower to pass and slower to unwind. The tokens that ripped after Sept. 15 are pricing the first version of the answer, plus the death of a bill that might have made the buys radioactive. They are not holding an act of Congress.

January 2029 and the Reversal Risk

Hougan does not hide the hole. Agency rules are not legislation. A new administration in January 2029 could install a different SEC and CFTC and take a harder line. His counter is time. Two years, he says, is long enough for large firms to build onchain, and by then he expects crypto to be “too big to crush.”

That wager is now the baseline the market is using. Lummis can still try to revive a market-structure bill after the midterm elections, and Tillis’s reconsideration motion is the only formal latch still on the Senate door. Neither changes what Coinbase can pay on USDC this month, or the five-year clock on the tokenization order, or the fact that a national exchange license does not exist.

The banks got the issuer ban in 2025 and then overplayed the rest. Incumbent exchanges kept the slog that protects them. Coinbase kept the rewards channel it already plugged into Morpho. Buyback tokens got a staff paragraph that staff has already edited. Hougan thinks the market took the good end of that trade. The reconsideration motion is still the only formal path back to the Senate floor, and the rewards Coinbase is already paying do not depend on it.

Disclaimer: This article is news reporting and analysis of a Senate vote, an SEC order, and a Bitwise client memo. It is informational only and is not investment advice, tax advice, or a recommendation to buy, sell, or hold bitcoin, ether, USDC, NEAR, Uniswap, or any other digital asset or exchange stock. Readers should consult a licensed financial adviser and, where relevant, a securities lawyer before acting on stablecoin rewards, tokenized-stock venues, or token buyback programs. Figures and statuses come from the Sept. 15 Senate roll call, the Sept. 17 SEC order, the Sept. 25 and Sept. 28 staff FAQs, Morpho’s Sept. 18, 2025 product post, and Hougan’s Sept. 30 memo, and those figures and rules can change.