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A senior executive at Coinbase warned that changes to the US stablecoin framework could weaken Washington\u2019s position in the global race for digital payments, just as China moves to make its central bank digital currency (CBDC) more competitive.<\/p>\n
In a post on X, Faryar Shirzad, Coinbase\u2019s chief policy officer, said the debate over whether US-issued stablecoins can offer \u201crewards\u201d under the GENIUS Act could hurt US dollar stablecoins\u2019 global competitiveness. He pointed to a recent announcement from China\u2019s central bank<\/a> as evidence that rival financial systems are moving quickly to enhance the appeal of state-backed digital money.<\/p>\n The People\u2019s Bank of China, China\u2019s central bank, this week outlined a framework that will allow commercial banks to pay interest on balances held in digital yuan wallets starting Jan. 1, 2026. Lu Lei, a deputy governor at the PBOC, said the change would move the e-CNY beyond its original role as a digital cash substitute and integrate it into banks\u2019 asset and liability management.<\/p>\n \u201cThe digital RMB will move from the digital cash era to the digital deposit currency (Digital Deposit Money) era,\u201d said Lei in the report. \u201cIt has the functions of monetary value scale, value storage, and cross-border payment.\u201d<\/p>\n The GENIUS Act<\/a>, which passed in June<\/a>, established reserve and compliance rules for stablecoins while prohibiting issuers from paying direct interest. The law, however, allows platforms and third parties to offer rewards linked to stablecoin use.<\/p>\n Related: <\/strong><\/em>What the $310B stablecoin market reveals about crypto adoption<\/strong><\/em><\/a><\/p>\n \u201cIf this issue is mishandled in Senate negotiations on the market structure bill it could hand our global rivals a big assist in giving non-US stablecoins and CBDCs a critical competitive advantage at the worst possible time,\u201d Shirzad warned. <\/p>\n The warning comes as industry figures voice concerns about bank lobbyists trying to reopen the GENIUS Act. \u201cNow the banking lobby wants to reopen it,\u201d crypto policy commentator Max Avery said<\/a> in a post last week. <\/p>\n Avery pointed out that while banks currently earn around 4% on reserves parked at the Federal Reserve, consumers often receive close to zero on traditional savings accounts. Stablecoin platforms, he said, threaten that model by offering to share some of that yield with users.<\/p>\n Related: <\/strong><\/em>The crypto events that reshaped the industry in 2025<\/strong><\/em><\/a><\/p>\n Last week, Coinbase CEO Brian Armstrong said any attempt to reopen the GENIUS Act would cross a \u201cred line,\u201d<\/a> accusing banks of lobbying Congress to limit stablecoin rewards in order to protect their deposit base. He said Coinbase would continue to oppose efforts to revise the law, adding that he was surprised such lobbying was happening so openly.<\/p>\n <\/p>\n Armstrong also argued that banks are misjudging the issue, predicting they will eventually push to offer interest and yield on stablecoins themselves once the opportunity becomes clear. He described the current lobbying effort as \u201cunethical,\u201d saying it would ultimately fail.<\/p>\nStablecoin reward debate raises competition fears<\/h2>\n
Coinbase CEO calls GENIUS Act a \u201cred line\u201d<\/h2>\n