A senior government at Coinbase warned that adjustments to the US stablecoin framework might weaken Washington’s place within the world race for digital funds, simply as China strikes to make its central financial institution digital foreign money (CBDC) extra aggressive.
In a publish on X, Faryar Shirzad, Coinbase’s chief coverage officer, mentioned the controversy over whether or not US-issued stablecoins can provide “rewards” underneath the GENIUS Act might harm US greenback stablecoins’ world competitiveness. He pointed to a latest announcement from China’s central financial institution as proof that rival monetary programs are transferring rapidly 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 framework that may permit 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 position 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 Act, which handed in June, established reserve and compliance guidelines for stablecoins whereas prohibiting issuers from paying direct curiosity. The legislation, nonetheless, permits platforms and third events to supply rewards linked to stablecoin use.
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“If this difficulty is mishandled in Senate negotiations available on the market construction invoice it might hand our world rivals a giant help in giving non-US stablecoins and CBDCs a crucial aggressive benefit on the worst attainable time,” Shirzad warned.
The warning comes as business figures voice issues about financial institution lobbyists making an attempt to reopen the GENIUS Act. “Now the banking foyer desires to reopen it,” crypto coverage commentator Max Avery mentioned in a publish final week.
Avery identified that whereas banks at present earn round 4% on reserves parked on the Federal Reserve, shoppers usually 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 to reopen the GENIUS Act would cross a “pink line,” accusing banks of lobbying Congress to restrict stablecoin rewards in an effort to shield their deposit base. He mentioned Coinbase would proceed to oppose efforts to revise the legislation, including that he was stunned such lobbying was taking place so overtly.
Armstrong additionally argued that banks are misjudging the difficulty, predicting they’ll 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 might in the end fail.
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