Coinbase chief legal officer Paul Grewal has accused the US banking lobby of 'snatching defeat from the jaws of victory' on the Digital Asset Market Clarity Act, telling Yahoo Finance host Scott Melker that the trades got the deposit protections they demanded yet are still walking away from the compromise text.
Speaking from Consensus in Miami Beach on Tuesday, Grewal said the deal struck by Senators Thom Tillis and Angela Alsobrooks on 1 May represents real progress on market structure legislation that has eluded Washington for years. He pointed to founder Brian Armstrong's call to 'mark it up' as the right read of the moment.
"It's time to mark it up. We've been at this, in some cases for years, and it's very exciting that we're finally on the cusp of real market structure legislation," Grewal said. "For the first time in the US, we've made tremendous progress on a number of the key issues that have kept a variety of interested parties apart for some time."
The Coinbase legal chief was scathing on the banking trades' posture toward the rewards provisions. The compromise extends the prohibitions from the GENIUS Act on stablecoin issuers paying yield to all intermediaries, including exchanges like Coinbase. That was the banks' headline ask. They are now arguing the language still doesn't go far enough.
"There's been zero evidence ever offered that stablecoin rewards threaten banks or bank health in any way whatsoever," Grewal said. "Candidly, Scott, I'm a little confused as to why the banks can't take yes for an answer. They got what they wanted. And yet they seem to be snatching defeat from the jaws of victory."
Grewal argued the lobbying push reveals a wider agenda. "What this shows is that the banking trades all along had a much broader agenda than simply addressing concerns about a nonexistent risk of deposit play. They were focused, maybe even laser focused from the very beginning on killing rewards. That didn't happen, at least under this draft language."
On the parallel turf war over prediction markets, Grewal was equally direct. The New York attorney general's referral targeting Gemini and Coinbase as illegal gambling has been escalated to federal court, with the CFTC also suing several states in recent weeks. Grewal framed the dispute as a constitutional question about which level of government has authority over event contracts.
"You see state regulators and certain state attorneys general all over the country trying to grab power, trying to grab authority that the law doesn't give them," he said, citing the Commodity Exchange Act's 'exclusive jurisdiction' language for the CFTC. "We're going to unfortunately have to work this issue through the court system. I'm very confident that when all is said and done, the courts are going to see this our way."
Grewal expects the litigation to drag, however. "I would be shocked if this issue were resolved finally before the end of this year. I think it's going to bleed into 27. I also think that if federal courts of appeal rule in different ways, the Supreme Court's going to have to step in."
Asked whether the Clarity Act would clear Congress before summer, Grewal answered with a single word: "Yes." He added that the tokenisation roadmap, including the DTCC's plan to put roughly 4.5 quadrillion dollars of equities-volume on chain with around 50 partners, would put Coinbase in the running for what he called "the everything exchange." Coin Bureau analyst Guy has separately warned that if Clarity dies in the current Memorial Day window, comprehensive market structure legislation could push deep into 2027 or beyond.