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Coinbase (NASDAQ:COIN) is escalating its fight with legacy financial institutions over stablecoin rewards.
“Hypocrisy from banks is causing problems for crypto again,” Coinbase CEO Brian Armstrong said Monday on X. “Banks want to remove your ability to earn rewards when holding stablecoins.”
Armstrong was referring to lobbying efforts from several banking organizations against stablecoin rewards offered by cryptocurrency companies.
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The American Bankers Association and several banking groups, in an August joint letter, described stablecoin reward programs as an evasion of the GENIUS Act. The stablecoin legislation signed into law by President Donald Trump in July prohibited stablecoin issuers from paying interest to users, but said nothing about cryptocurrency firms like exchanges. The ABA and the banking groups said this is a “loophole” that lawmakers should close with the anticipated cryptocurrency market structure bill.
The groups said allowing cryptocurrency companies to continue offering stablecoin rewards could lead to a flight of bank deposits, which could impact the ability of banks to provide lending services. They cited an April Treasury Department report that suggested stablecoin interest payments could result in $6.6 trillion in deposit outflows.
According to Armstrong, however, banks are unfairly seeking to squash competition to the detriment of U.S. consumers.
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“Competition is good for consumers,” he said on Monday. “They’re just mad that they’re losing. Big banks don’t need another bailout, they need better products.”
Armstrong and Coinbase are taking the fight to Capitol Hill. Later on Monday, Armstrong shared a video of himself at the Capitol, noting that he was speaking to senators to side against the banks. He also called on members of the cryptocurrency community to do the same, sharing a website named “No More Bailouts” for them to contact their senators.
“We’re making sure the Senate knows bailing out the big banks at the expense of the American consumer is not ok,” he said.
Coinbase’s official X account also shared Armstrong’s message, adding, “If you wouldn’t ban credit card rewards, don’t ban crypto rewards.”
