Opinions

“Banks Want to Ban Rewards on Stablecoins” Coinbase CEO Brian Armstrong States

While stablecoin adoption is growing, big banks are now under fire for trying to stop crypto rewards programs. Coinbase CEO Brian Armstrong warned on X that banks are lobbying to end USDC reward rights under the GENIUS Act. He argued that this move would protect banks’ monopoly while hurting American consumers.

Armstrong stressed that crypto has clear rules coming, and banks are pushing for another handout by blocking stablecoin rewards. John Deaton, Managing Partner at Deaton Law and well-known XRP supporter, echoed Armstrong’s warning. He wrote on X, “Bank’s are the enemy of the people. I’m glad Brian Armstrong is bullish and fighting back against them but we can’t underestimate the hold they have on many Senators.” He also criticized Senator Ed Markey for siding with banks since the 2008 financial crisis.

The controversy comes after a letter from the American Senate Blockchain Association surfaced on Monday. The group, led by Senators Tim Scott and Elizabeth Warren, accused big banks of trying to dismantle stablecoin legislation. They argued that banks are recycling an old playbook, claiming stablecoins would drain deposits and shrink lending.

“Big banks are dusting off a predictable playbook using the ‘loophole’ trope whenever there is competition,” the letter stated. Senators pointed out that the same big banks blamed for the 2008 crash have now piled up trillions in deposits. According to them, these banks have only grown stronger, often leaving smaller banks struggling to keep up.

Besides the regulatory fight, fresh data from rwa.xyz shows a shift in stablecoin liquidity. Tether (USDT) led inflows with $6.3 billion in the past 30 days. Ethena’s USDe followed with $2.1 billion, while Circle’s USDC added $1.7 billion. Paxos’ PYUSD also gained ground with $1.2 billion inflows. Other tokens saw modest growth. USDai added $478 million, M gained $417 million, and USDtb pulled in $355 million.

Paxos’ USDG and BitGo’s USD1 logged smaller inflows of $173 million and $109 million. However, a $210 million decline in MakerDAO’s USDS indicated a shift in capital toward more modern possibilities. This fight shows how old banks and new crypto firms are pulling in opposite directions. Banks want to stay in charge, but crypto leaders argue people should have the freedom to earn and use rewards without losing out.

Terron Gold