- •Brian Armstrong criticizes banks for fighting USDC rewards
- •Claims banks are being hypocritical amid the GENIUS Act
- •Tension rises between traditional finance and crypto
Coinbase CEO Brian Armstrong has publicly criticized traditional banks for attempting to block rewards tied to stablecoins like USDC, calling their actions “hypocritical.” His comments come amid growing tensions between crypto innovators and legacy financial institutions, particularly in light of the GENIUS Act, which aims to provide legal protection for certain digital asset products.
Armstrong’s remark shines a spotlight on the financial sector’s resistance to change—especially when it comes to decentralized finance (DeFi) and digital dollars that challenge traditional savings and yield products.
The Core Issue: USDC Rewards Under Fire
At the center of the controversy is the ability for platforms like Coinbase to offer rewards to users holding USDC, a stablecoin pegged to the U.S. dollar. While these rewards are typically a small percentage, they provide an alternative to low-interest bank savings accounts.
Despite the GENIUS Act offering a framework to protect these types of offerings, some banks are reportedly lobbying to block or limit access to stablecoin rewards. Armstrong argues that banks are attempting to suppress competition while enjoying government support and deposit protections.
“Banks are fine offering 0.01% interest while making billions off deposits,” Armstrong implied. “But the moment crypto offers users a better option, it becomes a threat.”
Crypto vs. Banks: The Battle Over Yield
This situation underscores a broader battle over who gets to offer yield in a digital economy. While banks argue stablecoin rewards are risky, crypto advocates believe that regulated digital assets like USDC—with transparency and backing—offer safe and fair alternatives.
The GENIUS Act was meant to bridge this divide, but if banks succeed in undermining its intent, it could stall progress for U.S.-based crypto innovation.
For now, Armstrong’s comments serve as a rallying cry to both regulators and users: don’t let traditional institutions define the future of money.