Coinbase
$1.53B
CEO Brian Armstrong has warned that revisiting the GENIUS Act would cross a “red line”.
He accused major banks of pressuring Congress to change rules around stablecoin rewards to protect their deposits.
In a post on X, Armstrong said he was surprised banks could lobby so openly without public reaction. He stated that Coinbase would oppose any decision to amend the law.
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Armstrong also suggested that banks might later reverse their position. He predicted that once they see the financial potential of stablecoins, they will want to offer interest and yields themselves.
His remarks followed a post from Max Avery, a board member at Digital Ascension Group, who explained why some banks are urging lawmakers to change the law.
Avery said these proposed changes could go beyond banning direct interest payments by stablecoin companies. He warned that the revisions might also block “rewards” programs, which would cut off ways platforms share returns with users.
Avery pointed out that banks currently earn around 4% on reserves held with the Federal Reserve, while most customers get little to no interest on their savings.
According to Avery, this has led banks to frame the issue as a “safety concern”. However, he said independent studies have found no evidence that stablecoins cause large withdrawals from smaller banks.
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