The regulatory bill originally intended to protect traditional banks has unexpectedly led to another compliant path for stablecoins, marking a new phase in the battle between banks and the cryptocurrency industry over deposits.

Written by: Blockchain Knight

The U.S. banking industry continues to lobby Congress to promote the implementation of the Clear Act, attempting to rely on the bill's provisions to prohibit crypto platforms from engaging in deposit interest-bearing activities based on stablecoins, thereby safeguarding its own savings market.

However, loopholes in the revenue classification rules of the bill have enabled leading exchange Coinbase, in collaboration with Ethena, to develop a new model that circumvents regulatory restrictions, posing a substantial challenge to traditional banks' deposit barriers.

Section 404 of the Clear Act is a key provision resulting from the banking sector’s multiple negotiations, which categorizes stablecoin revenue into passive income and active income.

Passive investments that earn interest simply by holding assets are directly prohibited due to their high overlap with bank demand deposits; instead, rewards generated from actual operations such as trading and asset transfers are allowed to be retained under the regulation.

Banks are vigorously promoting this restriction, primarily concerned that crypto platforms, which are not subject to bank-level reserve requirements and do not fall under FDIC deposit insurance, can still attract depositors' funds with high yields.

JPMorgan CEO Jamie Dimon has publicly criticized the original details of the bill, stating that allowing crypto products to attract deposits will undermine the legitimate interests of the banking industry. For the bill to become official legislation, it still needs to complete the full process of review by both the House and Senate, as well as presidential signing.

It is worth noting that stablecoins represent a core revenue segment for Coinbase, generating $305.4 million in revenue from related businesses in the first quarter of 2026, with nearly $19 billion in USDC held on the platform, accounting for more than a quarter of the global circulation total.

To maintain this profitable business, Coinbase has finalized deep integration with the Synthetic Dollar project Ethena, not only completing an equity investment in the project but also taking on the custody services for over $5 billion in Ethena assets.

Ethena's profit logic differs from traditional deposit interest calculations; it relies on spot holdings paired with perpetual contracts to profit from basis arbitrage, with all user returns originating from the project's active market trading.

User returns from depositing USDC are no longer mere idle funds earning interest; they perfectly align with the bill's definition of compliant income.

Industry calculations suggest that Coinbase can tap into about $13 billion in idle USDC through this product, attracting existing funds through product interest rate differentials.

Currently, the average annualized savings interest rate at U.S. banks is only 0.38%, with demand deposit rates as low as 0.07%, while Coinbase's partnered products can offer annual returns of up to 3.8%, creating a significant yield disparity that continues to guide retail and corporate idle funds to relocate.

Although total deposits at U.S. commercial banks exceed $19 trillion, the short-term diversion of tens of billions of dollars is unlikely to cause systemic risk; however, the loss of depositors will compel banks to raise deposit rates, which will directly squeeze the net interest margin profits that banks rely on.

Industry analysts believe that this collaboration is merely a pilot for industry transformation. Going forward, Coinbase can further leverage its own ecosystem to connect institutional financing and on-chain lending agreements, continually expanding on-chain dollar savings products.

The regulatory bill originally intended to protect traditional banks has unexpectedly led to another compliant path for stablecoins, marking a new phase in the battle between banks and the cryptocurrency industry over deposits.

Of course, if other exchanges follow suit, bankers may become restless and will undoubtedly attempt to obstruct the passage of the Clear Act further.