Coinbase CEO Brian Armstrong predicts US banks will reverse their stance on stablecoin regulation and finally foyer Congress to allow curiosity funds on these digital belongings.
Armstrong’s forecast, posted December 27 on X, contradicts the banking sector’s present efforts to strip yield-generating options from the GENIUS Act.
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Armstrong Predicts Banks Will Reverse Course on Stablecoin Curiosity Bans
He argued that lenders are at present defending low-cost deposits however will likely be pressured to undertake the expertise to compete for capital.
“My prediction is the banks will actually flip and be lobbying FOR the ability to pay interest and yield on stablecoins in a few 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 comparable to Circle and Tether from paying curiosity on to holders.
Nonetheless, it permits intermediaries—comparable to exchanges—to cross yield from the underlying Treasury reserves to customers.
As a result of this, banking lobbyists are petitioning lawmakers to reopen the laws and shut this loophole.
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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 surroundings, business banks wrestle to compete with out elevating deposit charges and compressing their internet curiosity margins.
Nonetheless, Armstrong characterised makes an attempt to amend enacted legislation as a “red line” for the crypto trade.
Precisely – I’m really impressed the banks can foyer for this with a straight face and never get kicked out of senator’s places of work. It takes some critical psychological gymnastics.
We received’t let anybody reopen GENIUS. Purple line situation for us. And can preserve advocating for our clients and the… https://t.co/6EfF2oBn5A
— Brian Armstrong (@brian_armstrong) December 26, 2025
He criticized the banking foyer’s method as “mental gymnastics.” He pointed to the contradiction of citing security issues 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 corporations, 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 finally lose the flexibility to carry deposits at near-zero charges. As a substitute, they might situation their very own tokenized {dollars} to seize the yield unfold straight.
Till 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.
