Coinbase CEO Says Banks Will Eventually Demand Interest-Paying Stablecoins
Coinbase CEO Brian Armstrong predicts US banks will reverse their stance on stablecoin regulation and ultimately foyer Congress to allow curiosity funds on these digital property.
Armstrong’s forecast, posted December 27 on X, contradicts the banking sector’s present efforts to strip yield-generating options from the GENIUS Act.
Armstrong Predicts Banks Will Reverse Course on Stablecoin Interest Bans
He argued that lenders are presently defending low-cost deposits however can be pressured to undertake the know-how to compete for capital.
“My prediction is the banks will really flip and be lobbying FOR the power to pay curiosity and yield on stablecoins in a number of years,” Armstrong wrote.
The prediction reframes the present legislative battle over the GENIUS Act as greater than a regulatory dispute. It presents the combat as a collision between legacy revenue safety and inevitable market evolution.
The GENIUS Act, signed in July 2025, prohibits stablecoin issuers corresponding to Circle and Tether from paying curiosity on to holders.
However, it permits intermediaries—corresponding to exchanges—to move yield from the underlying Treasury reserves to customers.
Due to this, banking lobbyists are petitioning lawmakers to reopen the laws and shut this loophole.
They argue that non-bank platforms can now provide close to risk-free Treasury yields of roughly 4% to five% on liquid money equivalents. In that setting, industrial banks wrestle to compete with out elevating deposit charges and compressing their web curiosity margins.
However, Armstrong characterised makes an attempt to amend enacted regulation as a “purple line” for the crypto business.
He criticized the banking foyer’s method as “psychological gymnastics.” He pointed to the contradiction of citing security considerations whereas defending a enterprise mannequin constructed on paying depositors below-market charges.
The Coinbase CEO additionally described the present lobbying spend by banking commerce teams as “100% wasted effort.”
Notably, a coalition of 125 crypto companies, together with Coinbase, just lately submitted a letter to the Senate Banking Committee opposing any revisions. The group argued that reopening the invoice would undermine regulatory certainty.
Armstrong’s place implies that banks will ultimately lose the power to carry deposits at near-zero charges. Instead, they might issue their own tokenized dollars to seize the yield unfold immediately.
Until that pivot happens, Coinbase and its friends intend to defend the present framework that permits them to function the high-yield interface for greenback holders.
The publish Coinbase CEO Says Banks Will Eventually Demand Interest-Paying Stablecoins appeared first on BeInCrypto.
