Coinbase Eyes Regulatory Win as Trump Pushes Crypto-Friendly Legislation

By Connor Hart

President Trump and his administration have worked to open the doors for widespread adoption and investment in the crypto industry, and things are moving more quickly than expected, Coinbase said.

"It's really urgent for us to get it settled so that investors can invest in the sector, and that tokens that are issued can be traded on our platform," Faryar Shirzad, Coinbase's chief policy officer, said Wednesday.

Now, amid what has been dubbed "Crypto Week," several bills are up for consideration by Congress. Should they become law, they will provide protection to the industry in the event that another administration more similar to that of former President Joe Biden tries to drive the crypto industry offshore, Shirzad said.

Coinbase--which is the largest cryptocurrency exchange in the U.S., currently offering futures trading in the U.S. and spot and perpetual futures products outside the U.S.--stands to benefit from these bills' passage.

One of the bills, known as the Genius Act, would set up oversight of stablecoins, a popular crypto asset typically pegged to a government currency such as the U.S. dollar. That peg keeps their price steady, making them attractive to traders looking for a store of value while they buy and sell more volatile cryptocurrencies.

The stablecoin market, currently valued at around $240 billion, is projected to grow significantly in the coming years, with high-end estimates at $1 trillion and higher, analysts said. Coinbase has a stake in Circle, the largest U.S. stablecoin issuer.

House lawmakers are due to convene Thursday afternoon, when they are expected to pass the stablecoin measure, which has already been agreed to in the Senate and could be signed by Trump as soon as Friday. The vote comes after the measure ran into unexpected hurdles earlier this week, after some conservative holdouts voted against the bill on the basis that it didn't include language to prohibit the U.S. from issuing a central-bank digital currency.

Other bills up for consideration include the Clarity Act, which would set rules for when an asset is considered a security, to be overseen by the Securities and Exchange Commission, as opposed to when it is considered a commodity that is overseen by the Commodity Futures Trading Commission.

If passed, the bill would likely spur the widespread adoption of digital assets by institutional investors such as asset managers, hedge funds and banks, analysts said. That is because the act aims to give institutions confidence in what digital assets they can trade and hold.

Supporters hope the act passes the House this week, setting it up to be signed into law by September.

Write to Connor Hart at connor.hart@wsj.com