A senior govt at Coinbase has warned that modifications to the US stablecoin framework might weaken Washington’s place within the international race for digital funds, simply as China strikes to make its central financial institution digital foreign money (CBDC) extra aggressive.
In a put up on X, Faryar Shirzad, Coinbase’s chief coverage officer, mentioned the talk over whether or not US-issued stablecoins can provide “rewards” underneath the GENIUS Act might damage US greenback stablecoins’ international competitiveness. He pointed to a current announcement from China’s central financial institution as proof that rival monetary methods are transferring shortly to boost the enchantment of state-backed digital cash.
The Folks’s Financial institution of China, China’s central financial institution, this week outlined a brand new framework that may enable industrial banks to pay curiosity on balances held in digital yuan wallets beginning Jan. 1, 2026. Lu Lei, a deputy governor on the PBOC, mentioned the change would transfer the e-CNY past its unique function as a digital money substitute and combine it into banks’ asset and legal responsibility administration.
“The digital RMB will transfer from the digital money period to the digital deposit foreign money (Digital Deposit Cash) period,” mentioned Lei within the report. “It has the features of financial worth scale, worth storage, and cross-border cost.”
Stablecoin reward debate raises competitors fears
The GENIUS Actwhich handed in Juneestablished reserve and compliance guidelines for stablecoins whereas prohibiting issuers from paying direct curiosity. The regulation, nevertheless, permits platforms and third events to supply rewards linked to stablecoin use.
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“If this problem is mishandled in Senate negotiations in the marketplace construction invoice it might hand our international rivals an enormous help in giving non-US stablecoins and CBDCs a important aggressive benefit on the worst potential time,” Shirzad warned.
The warning comes as trade figures voice considerations about financial institution lobbyists making an attempt to reopen the GENIUS Act. “Now the banking foyer needs to reopen it,” crypto coverage commentator Max Avery mentioned in a put up final week.
Avery identified that whereas banks at present earn round 4% on reserves parked on the Federal Reserve, customers typically obtain near zero on conventional financial savings accounts. Stablecoin platforms, he mentioned, threaten that mannequin by providing to share a few of that yield with customers.
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Coinbase CEO calls GENIUS Act a “pink line”
Final week, Coinbase CEO Brian Armstrong mentioned any try and reopen the GENIUS Act would cross a “pink line,” accusing banks of lobbying Congress to restrict stablecoin rewards with the intention to shield their deposit base. He mentioned Coinbase would proceed to oppose efforts to revise the regulation, including that he was stunned such lobbying was taking place so overtly.
Armstrong additionally argued that banks are misjudging the difficulty, predicting they may ultimately push to supply curiosity and yield on stablecoins themselves as soon as the chance turns into clear. He described the present lobbying effort as “unethical,” saying it could in the end fail.
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