Coinbase’s response to the US Treasury on the GENIUS Act is worth noting.
Coinbase is a large DASP (digital asset service provider).
They argue this definition (Q4) should only apply to actual financial middlemen doing financial intermediation.
If you are only running core software or a blockchain validator, you shouldn’t be included.
They also point out that only providing a wallet or network access is not the same as an “offer” (Q9). This is important so platforms don’t get wrongly classified as sellers.
Growth Incentives Matter.
For platforms like Coinbase to support growth, these points are crucial:
– Taxes (Q37 & 38): Stablecoins are basically digital cash. So, they must be treated as cash equivalents, not debt. This means we should avoid complex Form 1099-DA reporting for every stablecoin transaction.
– Rewards (Q14): The ban on paying interest applies only to the stablecoin issuer. As a DASP, Coinbase insists this lets them still run loyalty and rewards programs. This is how platforms attract users and keep the market competitive!
– Collateral (Q6 & 7): Stablecoins should be accepted as cash equivalent margin and collateral by big financial institutions.
Coinbase wants clear boundaries on penalties (Q1 & 20). Criminal liability should only attach for “knowing” violations of the illegal issuance rules. You shouldn’t hit a DASP with the heaviest fines for a simple, non-knowing offer/sale issue. Also, civil money penalties should be strictly limited to the issuers.
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