Coinbase CEO, Brian Armstrong, is advocating for the U.S. to adopt stablecoin policies similar to those of China, specifically highlighting the interest payments provided by China’s central bank digital currency (CBDC). His comments come at a critical time when his company is grappling with significant challenges to its revenue streams, particularly from pressures by the U.S. banking lobby regarding the GENIUS Act.
Armstrong took to social media to express his views, arguing that the implementation of interest on stablecoins in China exemplifies a strategy that benefits the average citizen and enhances competitive advantage. He raised concerns about the U.S. overlooking opportunities to provide similar benefits, asserting that the ability to offer rewards on stablecoins would not interfere with traditional bank lending processes.
In response, some analysts in China expressed skepticism toward Armstrong’s characterization, noting a critical distinction: the digital yuan is not categorized as a stablecoin. Analysts argue that the interest payments may not signify Tibet’s robust competitive position but are rather a reaction to the digital yuan’s slow adoption rate compared to established mobile payment systems like WeChat Pay and Alipay, which earn interest on yuan deposits. They note that the recent interest program, implemented at the start of January, is subsidized by commercial banks, and the rates are likely less appealing than traditional demand deposit offerings.
This debate unfolds in the context of escalating lobbying efforts surrounding U.S. stablecoin regulations, particularly in relation to the GENIUS Act, enacted in July 2025. The legislation prevents stablecoin issuers from directly paying interest to holders but permits third-party platforms to share yield through rewards programs. This framework benefits companies like Coinbase, which are now under increasing pressure from the banking sector. The American Bankers Association, along with numerous state banking associations, has voiced their concerns in a letter to the Treasury Department, arguing that high-yield programs offered by stablecoin platforms could destabilize the banking system by prompting deposit withdrawals, which could jeopardize around $6.6 trillion in lending capacity.
The push from the banking community continues, with more than 200 community bank leaders recently urging Congress to broaden the interest prohibition to include affiliates and partners of stablecoin issuers. In a counter-response, Armstrong has labeled any moves to revisit the regulations as a “red line,” criticizing banks for profiting from high reserve rates at the Federal Reserve while providing minimal returns to depositors.
Armstrong’s reference to China seems intended to build a narrative around competitiveness in the financial sector, questioning why the U.S. does not adopt similar beneficial practices. However, critics caution that the nature of CBDCs and private stablecoins differs significantly, suggesting that comparisons may not be entirely valid. Despite this, Armstrong’s argument about the advantages of yield-sharing resonates in the broader dialogue concerning the role of private platforms in a landscape traditionally dominated by banks. The ongoing discourse ultimately revolves around the extent to which these platforms should compete with banks in attracting deposits.
