TLDR
- Brian Armstrong urged the Senate not to support banks by banning crypto rewards.
- Coinbase escalated its lobbying efforts in Washington during Senate discussions on crypto regulation.
- Armstrong stated that banks are trying to block stablecoin rewards to protect their monopoly.
- He emphasized that the GENIUS Act already settled the issue of allowing crypto rewards.
- A Treasury report warned that up to $6.6 trillion could move from banks to stablecoins.
Coinbase CEO Brian Armstrong accused banks of attacking crypto rewards to defend their monopoly on Capitol Hill Monday. He warned senators not to protect traditional finance by cutting off stablecoin incentives currently allowed under the GENIUS Act. Armstrong made these statements during Senate discussions on the Digital Asset Market Structure and Investor Protection Act.
Coinbase Fights TradFi Over Crypto Rewards
Brian Armstrong stood firm against banks’ lobbying efforts, stating they aim to block crypto rewards to protect their dominance. He addressed lawmakers in Washington as Senate talks progressed on new digital asset legislation.
“Banks want to ban rewards to maintain their monopoly,” Armstrong said.
According to him, banks fear losing control over customer capital to stablecoin platforms offering crypto rewards. Although the GENIUS Act disallowed interest on stablecoins, it still permitted rewards, creating a controversial gray area. Banks now argue that these rewards are a loophole undermining regulatory limits.
Armstrong pushed back, stressing that the law already resolved this issue and does not need revisiting. “They’re trying to relitigate something we already settled,” he stated. Coinbase believes Congress should avoid favoring banks by restricting crypto rewards that benefit consumers.
Stablecoin Rewards Could Trigger Capital Shift
A Treasury report released in April estimated up to $6.6 trillion could exit banks due to attractive stablecoin rewards. This shift could disrupt banks’ ability to lend, raising concerns among regulators and financial institutions. As a result, banks are urging stricter rules on crypto rewards.
However, Coinbase argues that banning rewards would penalize innovation and limit consumer choice. Armstrong maintained that such a move would amount to subsidizing banks again, this time using crypto policy.
“We’re making sure the Senate knows this is not ok,” he added.
The ongoing debate highlights the growing tension between traditional banking and the evolving crypto economy. With stablecoin usage on the rise, crypto rewards continue to be a key factor in shaping future market structures.
