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Coinbase’s Armstrong Draws Red Line as Banks Seek to Curb Platform Stablecoin Yields

His warning crystallizes a fight over whether intermediaries can share Treasury-based rewards under the new federal stablecoin framework.

Overview

  • In a Dec. 27 post, Brian Armstrong said Coinbase will oppose any move to reopen the law and predicted banks will later lobby to pay interest on stablecoins.
  • Banking trade groups have renewed appeals to Congress to close the provision that lets non‑bank platforms pass reserve yields of roughly 4%–5% to users.
  • The GENIUS Act bars issuers from paying interest directly but permits exchanges and other intermediaries to offer rewards sourced from the assets backing one‑to‑one reserves.
  • About 125 crypto companies, including Coinbase, recently urged the Senate Banking Committee to preserve the statute, arguing that reopening it would erode regulatory certainty.
  • Separately, lawmakers are circulating a digital‑asset tax discussion draft that would ease treatment of small payments and address staking and mining income, intersecting with the stablecoin policy debate.