[Digital Today reporter Yoonseo Lee] Executives at cryptocurrency exchange Coinbase directly countered concerns over systemic risk surrounding payment-focused stablecoins.

On May 25 (local time), blockchain media outlet BeInCrypto reported that Coinbase Chief Legal Officer Paul Grewal (폴 그레월) and Chief Policy Officer Faryar Shirzad (파랴르 쉬르자드) publicly backed the CLARITY Act, a bill on digital asset market clarity. They pushed back against claims that privately issued digital dollars could increase systemic risk for the U.S. economy.

The comments came as the U.S. Senate reviews the CLARITY Act. With Coinbase executives simultaneously setting out their support for the bill, assessments say the industry’s political message around stablecoins and the CLARITY Act has become clearer.

Grewal said stablecoin oversight should not be seen as a confrontation between the public and private sectors. He said private money is not inherently more risky, and that what matters is risk management, access and oversight. He also argued the CLARITY Act supports these elements.

Shirzad pointed to the Coinbase policy view that privately issued instruments already account for a large share of the U.S. monetary system. He said about 90 percent of M2, a U.S. money supply measure, consists of privately issued instruments such as commercial bank deposits and money market fund (MMF) shares. He argued stablecoins cannot be viewed only as exceptional risk assets.

Coinbase drew a line in particular, saying the stablecoin framework under the GENIUS Act cannot be placed on the same level as bank regulation. Under the GENIUS Act framework signed in July last year, stablecoin issuers must hold cash and short-term U.S. Treasuries as reserves, and tokens in circulation must be backed one-to-one. Lending, leverage and fractional reserves are prohibited.

Shirzad said, "Banks are regulated that way because they make loans, transform maturities, operate about 10-to-1 leverage, and create credit," and added, "Stablecoin issuers cannot do those things."

Coinbase also argued that the stablecoin issuance structure could be more transparent than bank deposits. Shirzad said issuers must undergo monthly reserve attestations and that on-chain real-time visibility is secured. He said the framework provides a level of transparency that bank deposits do not offer.

In markets, the support is being read as a signal aimed at the legislative phase, beyond a simple expression of opinion. As a CLARITY Act vote in the Senate Banking Committee heads toward the full Senate stage, public industry support could affect the final wording on whether stablecoins can offer yield and on market structure rules.

The remaining issue is how to reconcile the Senate version and the bill that has already passed the House. Under the legislative timetable, there is also not much time for the CLARITY Act to be handled before the midterm elections. In this situation, Coinbase’s move to separate the risk structure of payment stablecoins from the risk structure of banks has increased the likelihood of a direct link to debates over regulatory intensity and how the rules apply in future Senate negotiations.

Money that’s “private” isn’t any more inherently risky than healthcare or security or transportation that’s private. It’s how you manage that risk, as well as access and oversight that matters. CLARITY promotes all this. https://t.co/1aYRA0FTOp