Coinbase executive says virtual currency banknotes are ‘like oil for the on-chain economy’

As Congress continues to debate industry rules, Coinbase executives are urging U.S. lawmakers to consider stablecoins and market structure legislation as interconnected parts of a broader crypto regulatory framework.

Speaking to Cointelegraph at the Blockchain Futurist Conference on Thursday, Coinbase Chief Business Officer Shan Agarwal offered his thoughts on how the Market Structure Bill could impact the US market.

According to Agarwal, both the market structure currently being considered in the US Senate (called CLARITY when passed by the House) and the GENIUS stablecoin bill passed in July “effectively act like oil for the on-chain economy.”

“GENIUS has laid the foundation for stablecoins and stablecoin supply to increase,” Agarwal said. “As the supply of stablecoins increases, there is more capital available on-chain that can flow into the new tokenized assets that are enabled through Clarity. So the stablecoins that are sitting idle on-chain are going to flow into money market funds and treasuries on-chain. So the whole ecosystem is flowing in a very positive way, and I think that’s very exciting for the growth of the industry.”

Sean Agarwal (left) speaks with Cointelegraph’s Sam Burji (right) at Thursday’s Blockchain Futurist Conference. Source: Cointelegraph

Scott Meadows, Interim Head of Business Development at Coinbase, told Cointelegraph: “GENIUS is starting to unleash a ton of new enthusiasm and institutional interest as companies and markets gain some understanding of the rules of the road,” adding:

“When you combine what Genius provides in terms of clarity (…) with the Market Structure Bill, these two end up being one plus one and three, because you end up with a rich ecosystem that provides clear pathways and rules of engagement for these institutions and markets to develop.”

Agarwal and Meadows’ comments came during the week the U.S. Treasury Department reviewed recommendations for implementation of the GENIUS Act. Coinbase has submitted a letter to the government requesting that the ban on stablecoin interest payments be limited to issuers only, but allowed for crypto exchanges.

Related: Circles weigh in on implementation of GENIUS law: “Simple and powerful rules”

Mr. Armstrong goes to Washington.

Policymakers are currently working to implement GENIUS, but Senate passage of the market structure bill, known as the Responsible Finance Innovation Act, has been delayed amid the U.S. government shutdown and partisan divisions.

Lawmakers were reportedly still debating the bill as of Tuesday, but it is unclear whether the Republican plan to pass a market structure bill by 2026 will come to fruition.

Coinbase CEO Brian Armstrong visited Washington, D.C., on October 23 to discuss market structure with lawmakers as negotiations attempt to prevent the shutdown. The CEO said at the time that around 90% of the legal framework had been agreed.

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