Coinbase CEO Brian Armstrong has warned that any move to reopen the GENIUS Act would cross a clear red line, accusing banks of lobbying lawmakers to weaken competition from stablecoins and fintech platforms as the fight over crypto regulation intensifies in Washington.
Armstrong warns against changes to the GENIUS Act
Brian Armstrong said efforts to revisit the GENIUS Act amount to an attempt by banks to stall innovation and protect legacy advantages. In a Sunday post on X, the Coinbase CEO said he was struck by how openly banks were lobbying Congress, adding that Coinbase would firmly oppose any attempt to rewrite the law.
Armstrong argued that the resistance is shortsighted. He predicted that banks would eventually reverse course and push to offer interest and yield on stablecoins once they grasp the scale of the opportunity. Until then, he said, lobbying to restrict the sector is not only wasteful but ethically questionable.
Banks target stablecoin rewards model
The comments followed a post by Max Avery of Digital Ascension Group, who explained why parts of the banking industry are pressing lawmakers to reopen the legislation. According to Avery, proposed changes would go beyond banning direct interest payments by stablecoin issuers and clamp down on rewards offered through platforms and third parties.
Avery noted that banks currently earn about 4 percent on reserves held at the Federal Reserve, while most consumers earn little to nothing on savings accounts. Stablecoin platforms challenge that imbalance by sharing yield with users. He dismissed claims that this poses risks to community banks, citing research that shows no evidence of unusual deposit outflows.
Stablecoins gain momentum in Congress
The debate comes as US lawmakers explore ways to make stablecoin usage more practical for everyday payments. Last week, Representatives Max Miller and Steven Horsford introduced a discussion draft proposing tax relief for small stablecoin transactions.
The proposal would exempt payments of up to $200 in regulated dollar pegged stablecoins from capital gains taxes. It also seeks to address long standing concerns around staking and mining by allowing taxpayers to defer income recognition on rewards for as long as five years, signaling growing political interest in mainstream crypto adoption.