Coinbase CEO Brian Armstrong said any attempt to reopen the GENIUS Act would cross a “red line,” accusing banks of using political pressure to block competition from stablecoins and fintech platforms.
On Sunday publish at X, Armstrong said he was “impressed” that banks could lobby Congress so openly without backlash, adding that Coinbase would continue to push efforts to revise the law. “We will not allow anyone to reopen GENIUS,” he wrote.
“My prediction is that the banks will actually turn around and lobby FOR the ability to pay interest and returns on stablecoins in a few years, once they realize the opportunity for them. So it’s 100% wasted effort on their part (besides being unethical),” Armstrong added.
The GENIUS Act, passed after months of negotiations, prohibits stablecoin issuers from paying interest directly, but allows platforms and third parties to offer rewards.
Related: What the $310 billion stablecoin market reveals about crypto adoption
Bank lobbying aims for “rewards” for stablecoins
Armstrong’s comments came in response to a post by Max Avery, board member and executive director of business development at Digital Ascension Group, who described why parts of the banking industry are pushing lawmakers to reconsider the law.
Avery argued that the proposed amendments would go beyond banning direct interest payments by stablecoin issuers and instead limit “rewards” more broadly, cutting off indirect yield-sharing mechanisms offered by platforms and third parties.
Avery noted that while banks currently earn about 4% on reserves parked at the Federal Reserve, consumers often receive close to zero in traditional savings accounts. Stablecoin platforms, he said, threaten that model by offering to share some of that yield with users.
“They call it a ‘security concern.” They are concerned about ‘community bank deposits,'” he wrote, adding that independent research “shows no evidence of a disproportionate outflow of deposits from community banks.”
Related: Crypto Events That Reshaped the Industry in 2025
US lawmakers are proposing tax breaks for stable-money payments
Last week, US lawmakers introduced a bill for debate aimed at reducing the tax burden on everyday cryptocurrency users by exempting small stablecoin transactions from capital gains tax. The proposal, introduced by Reps. Max Miller and Steven Horsford, would allow payments of up to $200 in regulated dollar-pegged stablecoins to avoid recognizing a gain or loss.
In addition to payments, the bill targets taxation issues around stakes and mining by allowing taxpayers to defer recognition of income on rewards for up to five years.
Magazine: If the crypto bull run is ending… it’s time to buy a Ferrari — Crypto Kid
About the Author
