Coinbase targets 4000 U.S. community banks in preparation for landmark crypto vote

Coinbase joins hands with Moov to enter the U.S. banking industry to promote the embedding of stablecoin services into small and medium-sized financial institutions

Coinbase (Nasdaq: COIN) is actively expanding its share of the U.S. banking market through a new agreement with payments company Moov. The cryptocurrency exchange aims to allow small banks and credit unions to directly provide stablecoin services without diverting customers to other platforms.

The agreement allows these banks to process stablecoins, transfer funds, settle payments, and ensure funds are available at any time around the clock. The move comes as the U.S. Senate approaches an early vote on the Clarity Act. As one of the most important crypto legislation in Washington, D.C., the Clarity Act has been on hold for several months amid persistent differences between banks and crypto companies over how to handle "digital dollars."

Coinbase and other crypto companies are urging senators to advance the bill. However, banking lobby groups have opposed it over concerns about reward payments offered in the form of stablecoins or other crypto assets. The industry is concerned that customers may withdraw funds from traditional bank accounts in order to obtain such rewards.

Seamless integration: No need to develop a completely new system

Coinbase embeds stablecoin services into the existing banking systems of small lenders. In this partnership, Coinbase is responsible for providing the encryption platform technology to support the service, while Moov is responsible for connecting it to the bank's existing payment system. This means that banks that choose this service do not need to develop a completely new encryption system from scratch.

Moov has established partnerships with more than 1,00 community banks and credit unions in the United States, and its network already supports functions such as card issuance, merchant payment and real-time fund transfer. Today, Coinbase is adding stablecoin service capabilities to these existing infrastructures.

Ryan VanGrack, vice chairman and head of corporate affairs at Coinbase, said that small financial institutions have long witnessed the use of cryptocurrencies by customers. "Community banks and credit unions have been witnessing customers using digital assets for years," Ryan pointed out."Through its partnership with Moov, Coinbase is providing the compliance infrastructure they need to enable them to embed these services directly into existing systems."

Industry resistance and political game

The Independent Community Bankers Association of America (ICBA), which represents independent community banks, has joined forces with other banking organizations to oppose the latest provisions of the Clarification Act. Its core concern is that stablecoin incentives may lead to the loss of deposits from local lenders.

Wade Arnold, co-founder and CEO of Moov, pointed out that demand for stablecoins from business customers has already emerged. "Commercial customers of community institutions have been required to accept stablecoins, but now they often need to leave their institutions to process such transactions," Wade said."We built this program to return the answer to the client's primary financial institution. What merchants need now is acceptance and lending capabilities. The key to the next step is uninterrupted financial support-because the underlying channel will never close. Institutions that introduce the technology now will be ready for the future."

At the political level, the situation remains complex. The Clarity Act requires at least 60 Senate votes to pass the next procedural hurdle, and there is no guarantee that supporters will have enough votes. Democrats have questioned the ethics code proposed in the bill, arguing that the current wording is not enough to prevent government officials from profiting from holding crypto positions or related business interests. Some Republicans hold a different view, worried about the impact on community banks if stablecoin incentives make traditional deposits less attractive.

Jill Castilla, chairman and CEO of Citizens Bank of Edmond in Oklahoma, said small businesses that use the bank care about payment costs and settlement speed. "Small business owner customers are looking for ways to reduce exchange costs and speed up collection," Jill said.