Coinbase CLO Backs Stablecoin Compromise, Predicts Clarity Act Summer Passage

Coinbase Chief Legal Officer Paul Grewal expressed confidence at Consensus 2026 that the Clarity Act will pass before summer ends, endorsing the Tillis-Alsobrooks stablecoin compromise and urging the banking industry to accept the deal. In an interview with The Block, Grewal described the updated bill as a workable middle ground that preserves activity-based rewards—yields tied to actual platform usage—while restricting idle yield, the balance-based reward model banks had flagged as a deposit-flight risk.

Stablecoin Compromise and Banking Opposition

Grewal delivered a pointed message to the banking trade: “I very much encourage the banking trade to not snatch defeat from the jaws of victory. Accept yes for the answer and move on.”

Coinbase CEO Brian Armstrong had publicly opposed earlier versions of the Clarity Act in January, but shifted his position after negotiations and regulatory meetings. By early April, Armstrong publicly supported an updated bill, saying “it’s time to pass the Clarity Act.”

Grewal said Armstrong had been consistent from the start: protecting stablecoin rewards was a red line. The Tillis-Alsobrooks compromise, in his view, holds that line. Regarding banks’ central objection that paying rewards on stablecoin balances creates a deposit-flight risk, Grewal stated: “When pushed, the banks in meeting after meeting and conversation after conversation — many of which I participated in personally — they produced nothing of substance to substantiate this argument. There’s zero evidence of this.”

Grewal noted that under the GENIUS Act, the federal stablecoin framework, any reward can be offered by any non-issuer for any purpose. He argued the compromise is the better deal for everyone, including the industry lobbying hardest against it.

Prediction Markets and Jurisdiction

On prediction markets, Grewal said the federal-state jurisdiction fight may require the Supreme Court to issue a final ruling. Congress granted the CFTC exclusive authority over event contracts, a mandate Grewal said certain state governments have misread in claiming their traditional gaming authority supersedes it. Lawsuits are now stacking up across state and federal courts.

Grewal pointed to the 2024 U.S. presidential election as the moment prediction markets earned their credibility. Polls consistently predicted a Kamala Harris victory; prediction markets had Donald Trump as the likely winner. “The proof was in that pudding,” he said.

Grewal argued that CFTC-regulated event contracts eliminate the house edge embedded in traditional sports books, giving prediction markets a durable advantage over conventional gambling as the user base scales.

Regulatory Landscape

When asked about concerns over the Trump administration’s involvement in crypto, Grewal declined to engage the political framing, instead arguing that cryptocurrency deserves “a fair chance to compete on the global stage — not an advantaged chance, not a disadvantaged chance.” He said policymakers focused on keeping America competitive against China will ultimately reach the right answers on crypto regulation.

Grewal praised SEC Chair Paul Atkins and CFTC Chair Mike Selig, stating they are not only fluent in what crypto can do but “champions themselves of using it to modernize an American financial system that has long lagged behind its full potential.”