Key Insights:
- Today’s crypto news highlights Coinbase’s stance, saying stablecoin rewards support payments, not bank savings.
- Research shows stablecoin rewards do not reduce bank deposits or lending.
- China already pays interest on its digital yuan, raising pressure on US policy.
In 2025, the United States passed a new law to bring stablecoins under clear rules. Stablecoins are digital versions of money, usually tied 1:1 to cash or safe assets.
As per the crypto news, the goal was simple. Make digital dollars safer to use, easier to understand, and more useful for everyday payments.
That law was termed the GENIUS Act. One small but important part of it allowed stablecoins to offer rewards. These rewards are not like bank savings interest.
They are small amounts meant to help people use digital dollars for payments, transfers, and online activity. Now, just months later, that rule is under pressure.
Crypto News: US Banks Push to Limit Stablecoin Rewards
As Congress prepares to debate a larger crypto bill in early 2026, major US banks are pushing lawmakers to reopen the GENIUS Act. Their main target is stablecoin rewards.
Banks argue that rewards on stablecoins could pull money out of bank accounts. If people move money away, banks say lending could suffer.
But research does not support that claim. Independent studies from Charles River Associates and Cornell looked at how people actually use stablecoins.
They found that most users rely on them for fast payments, transfers, and online transactions. They are not used like savings accounts. The rewards are small and do not replace bank interest.
In simple terms, people are not parking their life savings in stablecoins just because of rewards. This shows that the banking-specific fears are somewhat misplaced.
Crypto Market: The Real Issue Is Competition, Not Safety
The deeper issue is competition, as Coinbase executive noted. US banks earn more than $360 billion each year from payment fees and interest on customer funds.
This includes card swipe fees, transfer charges, and the interest banks earn while holding deposits.
Stablecoins offer a cheaper way to move money. Rewards make them more attractive for everyday use. That creates pressure on the traditional payment system.
From the banks’ point of view, stablecoins are not dangerous. They are disruptive, ones changing how customers look a payment rails. That is why banks want limits. Not because the incentives are high, but because it works too well.
China Has Already Made Its Move
While the US debates changes, China has already acted.
In January 2026, China began paying interest on its digital yuan. This makes its digital currency more attractive for trade and payments, especially across borders.
This matters because money dominance is not just about price. It is about usage.
If businesses and countries start using China’s digital currency more often, the US dollar will be used less over time. That slowly reduces US influence in global payments.
This is where Coinbase stepped in. Faryar Shirzad, Chief Policy Officer at Coinbase, warned that restricting stablecoin rewards now could weaken the digital dollar just as global digital payments are expanding. While the US argues internally, China is building momentum.
The choice in front of lawmakers is clear. Protect the current rules and keep US digital dollars competitive. Or restrict them and allow other systems to grow faster. This crypto news debate is no longer just about crypto. It is about who controls the future of digital money.
Source: https://www.thecoinrepublic.com/2026/01/08/crypto-news-coinbase-warns-stablecoin-reward-ban-could-benefit-china/
