Coinbase CEO Brian Armstrong said any attempt to reopen the GENIUS Act would cross a “red line,” accusing banks of using political pressure to block competition from stablecoins and fintech platforms.
In a Sunday post on X, Armstrong said he was “impressed” banks could lobby Congress so openly without backlash, adding that Coinbase would continue pushing back on efforts to revise the law. “We won’t let anyone reopen GENIUS,” he wrote.
“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, once they realize how big the opportunity is for them. So it’s 100% wasted effort on their part (in addition to being unethical),” Armstrong added.
The GENIUS Act, passed after months of negotiations, bars stablecoin issuers from paying interest directly but allows platforms and third parties to offer rewards.
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Bank lobbying targets stablecoin “rewards”
Armstrong’s comments came in response to a post by Max Avery, a board member and business development executive at Digital Ascension Group, who outlined why parts of the banking sector are pushing lawmakers to revisit the legislation.
Avery argued that proposed amendments would go beyond banning direct interest payments by stablecoin issuers and instead restrict “rewards” more broadly, cutting off indirect yield-sharing mechanisms offered by platforms and third parties.
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.
“They’re calling it a ‘safety concern.’ They’re worried about ‘community bank deposits,’” he wrote, adding that independent research “shows zero evidence of disproportionate deposit outflows from community banks.”
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US lawmakers propose tax relief for stablecoin payments
Last week, US lawmakers unveiled a discussion draft aimed at reducing the tax burden on everyday crypto users by exempting small stablecoin transactions from capital gains taxes. The proposal, introduced by Representatives Max Miller and Steven Horsford, would allow payments of up to $200 in regulated, dollar-pegged stablecoins to avoid gain or loss recognition.
Beyond payments, the bill targets taxation issues around staking and mining by allowing taxpayers to defer income recognition on rewards for up to five years.
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Source: https://cointelegraph.com/news/coinbase-ceo-genius-act-red-line-bank-lobbying-stablecoins?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
