Coinbase CEO Brian Armstrong has recently taken a stand against major banks attempting to block stablecoin rewards.
Big banks argue that stablecoins pose a threat to deposits and credit markets. Crypto supporters counter that stablecoins represent only a small fraction of the financial system while providing real benefits to consumers.
Tensions brewing? Let’s explore.
Armstrong Slams Banks
Armstrong has called out banks for their hypocrisy, saying they are trying to take away people’s ability to earn rewards on stablecoins. Although he is more optimistic than ever about clear crypto rules, he also warned that big banks are trying to intervene and grab another handout, this time by targeting the rewards users earn from holding USDC stablecoins.
“USDC rewards are law under the GENIUS Act, but banks want to undo them to maintain their monopoly,” he said.
Crypto Firms Push Back
Coinbase, along with other crypto firms like Kraken, Gemini, and BitGo, is leading a strong lobbying effort to stop banks from banning crypto rewards.
This comes as the Bank Policy Institute is pushing to prevent exchanges from offering stablecoin yields, arguing that stablecoins could threaten traditional bank deposits and credit markets.
The Blockchain Association is also defending the GENIUS Act against big banks trying to roll it back to protect their own interests. It also launched a campaign to make Congress and the public aware of why defending GENIUS matters.
Emilie Choi, Coinbase’s president and COO, also called out big banks, saying that if they truly cared about consumers, they would focus on creating better products instead of lobbying against companies outperforming them.
Lawyer John Deaton praised Armstrong for standing up to big banks, calling them “the enemy of the people.” However, he also warned that banks still hold significant influence over many Senators.
“Stablecoins Don’t Threaten Banks”
Concerns over banks interfering with the GENIUS Act have intensified following a letter from the American Senate Blockchain Association released on Monday.
Led by Senators Tim Scott and Elizabeth Warren, the group urged Congress to act, accusing banks of trying to weaken stablecoin legislation to protect their own business interests. It was pointed out that U.S. bank deposits total over $18 trillion, while the global stablecoin market is just $277 billion, a tiny fraction of the banking industry.
The letter noted that GENIUS was a bipartisan, carefully negotiated law involving all stakeholders, including banks. It also highlighted that stablecoins are not a risk but an upgrade to a system that has long underserved consumers.
Bullish Outlook for Crypto
Despite pushback from banks, crypto influencer Zach Humphries believes the trend remains bullish for crypto. With DeFi pushing banks to adapt and regulatory improvements, like the SEC removing outdated rules, the market could continue to rise in Q4 2025, with broader growth and altcoin momentum likely extending into 2026.
