A senior government at Coinbase warned that modifications 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 submit on X, Faryar Shirzad, Coinbase’s chief coverage officer, stated the talk over whether or not US-issued stablecoins can provide “rewards” underneath the GENIUS Act might damage US greenback stablecoins’ world competitiveness. He pointed to a latest announcement from China’s central financial institution as proof that rival monetary methods are transferring shortly to reinforce the enchantment of state-backed digital cash.
The Individuals’s Financial institution of China, China’s central financial institution, this week outlined a framework that can 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, stated 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,” stated Lei within the report. “It has the features of financial worth scale, worth storage, and cross-border fee.”
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 problem is mishandled in Senate negotiations in the marketplace construction invoice, it might hand our world rivals an enormous help in giving non-US stablecoins and CBDCs a crucial aggressive benefit on the worst doable time,” Shirzad warned.
The warning comes as business figures voice considerations about financial institution lobbyists attempting to reopen the GENIUS Act. “Now the banking foyer desires to reopen it,” crypto coverage commentator Max Avery said in a submit final week.
Avery identified that whereas banks at the moment earn round 4% on reserves parked on the Federal Reserve, shoppers usually obtain near zero on conventional financial savings accounts. Stablecoin platforms, he stated, threatened 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 stated any try to reopen the GENIUS Act would cross a “pink line,” accusing banks of lobbying Congress to restrict stablecoin rewards with a purpose to defend their deposit base. He stated Coinbase would proceed to oppose efforts to revise the legislation, including that he was shocked that such lobbying was occurring so brazenly.
Armstrong additionally argued that banks are misjudging the problem, predicting that they may finally 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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