Citi backs Coinbase stablecoin paying 3.75% yield weeks after its trade group opposed rewards

• Eight banking trade groups, including the Financial Services Forum chaired by Citi CEO Jane Fraser, sent a joint letter asking the Senate to ban stablecoin rewards.
• The Clarity Act failed a Senate procedural vote 49-50 on September 15, 2026, eleven votes short of the 60 needed.
• Citi and Coinbase’s new corporate checkout and account product, announced September 28, 2026, routes stablecoin payments through Citi while paying depositors 3.75% annually.

• 49-50 Senate procedural vote tally, 11 short of the 60-vote threshold
• 3.75% annual reward rate on the Citi-backed Coinbase stablecoin account
• Sept 15 banking letter sent, 13 days before the Citi-Coinbase deal was announced

Eight U.S. banking trade associations, including the Financial Services Forum, told senators in a joint letter that “when deposits decline, it reduces the availability of credit that supports communities and pathways to upward mobility.” The Financial Services Forum’s chair is Citi CEO Jane Fraser, according to the Forum’s own leadership page.

Thirteen days later, on Monday (September 28, 2026), Citi and Coinbase announced a partnership that does what the letter warned against. Citi now provides the banking behind a Coinbase account product paying 3.75% a year, first reported by BeInCrypto.

Citi Turns Stablecoin Payments Into Ordinary Bank Settlements

Under the arrangement, a customer pays a Citi client in stablecoins, Coinbase catches the payment and converts it to dollars, and Citi settles the funds like any other bank transfer. Coinbase described the setup in a post on X as bringing “instant stablecoin acceptance for institutions” onto “bank-grade, regulated infrastructure.”

The merchant never holds a token. The flow also runs in reverse: Coinbase’s payments customers get a Citi account-style product that converts incoming cash into stablecoins, which sit at Coinbase earning the 3.75% reward.

Citi says the Senate’s failure to pass the Clarity Act changes nothing about its plans. Shahmir Khaliq, Citi’s head of services, told the Wall Street Journal the bank is proceeding within its existing charter.

We are not hampered. We’re continuing to do what we do within the banking license we have, within the regulations we currently have.

Shahmir Khaliq, head of services, Citi

Fraser’s Trade Group Asked Congress to Prohibit the Reward Citi Now Banks

The signers wrote that “when deposits decline, it reduces the availability of credit that supports communities and pathways to upward mobility,” and asked the Senate to close what they called loopholes in the bill’s yield ban before it reached a floor vote.

Days later the bill failed the procedural vote 49-50, eleven votes shy of the 60 needed to advance, with the Journal reporting the rewards fight as a contributing factor. Citi’s own product with Coinbase now pays the 3.75% reward the letter sought to prohibit, a gap between lobbying position and business practice that neither Citi nor the Forum has publicly addressed.

Regulators Have Not Settled the Yield Question the Letter Raised

The joint letter’s core request, a blanket ban on interest-like payments regardless of how stablecoin issuers structure them, never made it into law once the Clarity Act stalled. That leaves the reward-versus-yield distinction to be fought out issuer by issuer.

Neither the letter nor the Citi-Coinbase announcement specifies whether the 3.75% is legally a “reward” tied to transaction activity, the category the trade groups said they would tolerate, or an interest-like payment on balances, the category they wanted banned.

BeInCrypto’s report named no merchants yet using the checkout service and no launch date, and Citi separately confirmed it is extending its private blockchain for corporate cash movement to Japan and the United Arab Emirates as part of the same push.

The CCS read. Citi’s move signals that large banks now see stablecoin infrastructure as revenue, not just a deposit threat, regardless of what their own trade associations tell Congress. For institutional treasurers, the practical test will be whether Citi’s 3.75% product survives a future rewards ban intact, or gets restructured once regulators define the line the ABA letter asked Congress to draw.

The Clarity Act’s stablecoin-yield language remains unresolved in the Senate, and neither Citi nor Coinbase has set a public launch date or named a merchant using the checkout service. Whether Congress revisits a narrower rewards ban, or leaves the Fed’s GENIUS Act rulemaking to settle the question instead, will determine if Citi’s 3.75% product needs to change shape before it scales.