Coinbase urges Treasury to keep GENIUS Act rules aligned with congressional intent

11 hours ago7 min read5 comments

In a move that underscores the deepening friction between the burgeoning digital asset sector and established regulatory frameworks, the cryptocurrency exchange behemoth Coinbase has formally petitioned the U. S.Treasury Department, urging it to adhere strictly to the congressional intent behind the proposed GENIUS Act. The core of their argument, articulated with the precision of a financier who understands that the future of capital is being rewritten on the blockchain, centers on a critical distinction: the Treasury must ensure its forthcoming rules do not inadvertently ensnare non-financial software within a regulatory net designed for financial intermediaries.This isn't merely a technicality; it's a foundational battle for the soul of Web3. The GENIUS Act, ostensibly crafted to modernize financial infrastructure and enhance security, stands at a precarious crossroads.If interpreted too broadly, its requirements could impose traditional financial licensing and compliance burdens on a vast ecosystem of decentralized protocols, open-source developers, and non-custodial wallet providers—entities that fundamentally do not engage in the activities of a bank or a broker. Coinbase’s intervention is a calculated defense of the very innovation that makes crypto transformative.They are essentially arguing that regulating a smart contract like a securities dealer is as logically incoherent as regulating the HTML code of a website as if it were a newspaper publisher. The implications are staggering.A heavy-handed approach from the Treasury could stifle American leadership in the crypto space, pushing development and talent to more accommodating jurisdictions like Singapore or Switzerland, while simultaneously hamstringing the very DeFi and Web3 applications that promise to democratize finance. This regulatory clarity, or lack thereof, is the single greatest obstacle to the maturation of the asset class.Institutional capital from TradFi giants remains on the sidelines, not due to a lack of interest, but because of the persistent fog of regulatory uncertainty. The Treasury's decision on this matter will serve as a definitive signal to Wall Street about whether the U.S. is truly open for business in the digital age or if it will cede its financial primacy.It’s a high-stakes game of regulatory chess, where a single misinterpretation could checkmate an entire industry of American innovation, determining whether the next decade of financial evolution is built on U. S. soil or abroad.

#Coinbase

#GENIUS Act

#Treasury Department

#crypto regulation

#non-financial software

#compliance

#congressional intent

#featured