TLDR Brian Armstrong praised China’s digital yuan interest policy as a competitive advantage for ordinary users. He argued that the United States should allow stablecoinTLDR Brian Armstrong praised China’s digital yuan interest policy as a competitive advantage for ordinary users. He argued that the United States should allow stablecoin

Coinbase CEO Defends China CBDC Amid U.S. Stablecoin Reward Fight

2026/01/08 18:52
4 min read

TLDR

  • Brian Armstrong praised China’s digital yuan interest policy as a competitive advantage for ordinary users.
  • He argued that the United States should allow stablecoin rewards to benefit consumers without harming bank lending.
  • Chinese analysts stated that the digital yuan is not a stablecoin and the interest program addresses low adoption rates.
  • The GENIUS Act permits platforms like Coinbase to offer rewards but prevents issuers from paying direct interest.
  • Banking groups are pressuring regulators to close the rewards provision they claim threatens traditional lending capacity.

Coinbase CEO Brian Armstrong has praised China’s central bank digital currency (CBDC) policy, sparking debate during an ongoing regulatory fight. He supported China’s move to offer interest on its digital yuan while defending U.S. stablecoin rewards threatened by banking lobby pressure. His remarks drew criticism and raised questions about timing and motives.

Armstrong Cites China CBDC to Defend U.S. Stablecoin Rewards

On January 8, Armstrong posted on X, praising China’s interest model for its digital yuan, calling it a “competitive advantage.” He argued that allowing interest-like rewards on U.S. stablecoins would support consumers and promote innovation. “We are missing the forest through the trees in the U.S.,” he wrote.

Armstrong said these rewards help regular people and don’t harm traditional lending, urging regulators to let markets decide freely. However, Chinese analysts dismissed the comparison, stressing that China’s digital yuan is a central bank instrument, not a private stablecoin. They noted that China’s interest program responds to low adoption, not competitive strength.

Crypto commentator Phyrex clarified that interest on the digital yuan is subsidized by commercial banks, not China’s central bank. He said that the interest rates remain below demand deposit levels and are intended to boost digital yuan usage. Armstrong’s interpretation, according to critics, misrepresents the policy’s true purpose and context.

GENIUS Act Spurs Clash Between Coinbase and U.S. Banks

The GENIUS Act passed in July 2025 allows platforms to offer yield-sharing on stablecoins, though it bars issuers from direct interest payments. This exception benefits companies like Coinbase that offer “rewards” without violating interest bans. However, U.S. banking groups now seek to eliminate this flexibility through new regulatory proposals.

In November, the American Bankers Association and 52 state associations sent a letter asking the Treasury to close what they call a “loophole.” They claimed that stablecoin rewards could drain bank deposits and risk up to $6.6 trillion in lending. Banks want restrictions extended to platforms partnering with stablecoin issuers.

More pressure followed on January 7, when over 200 community bank leaders wrote to the Senate with similar demands. They asked lawmakers to apply the same rules to affiliates and partners of stablecoin issuers. These efforts challenge Coinbase’s ability to maintain a key revenue stream under the current rules.

Armstrong Draws Red Line as Lobbying Intensifies

Armstrong responded sharply on December 26, warning against any rollback of the GENIUS Act’s protections for platforms. He said banks earn about 4% on reserves at the Federal Reserve while offering near-zero to customers. He accused them of “mental gymnastics” for framing rewards programs as financial risks.

His comparison to China, though challenged, appears aimed at showing global momentum for digital currency incentives. Armstrong suggests the U.S. should not fall behind on offering consumer benefits. The appeal to China’s policy positions Coinbase in opposition to traditional banking power.

While Armstrong’s framing of China CBDC policy faces scrutiny, his broader argument remains directed at preserving platform-level stablecoin rewards. The debate now shifts to lawmakers considering whether platforms should retain this exemption. Discussions continue as the Senate reviews the latest letters from banking leaders.

The post Coinbase CEO Defends China CBDC Amid U.S. Stablecoin Reward Fight appeared first on CoinCentral.

Market Opportunity
Union Logo
Union Price(U)
$0.001013
$0.001013$0.001013
+22.19%
USD
Union (U) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

MetaMask Unveils US Payment Card With Mastercard and On-Chain Rewards

MetaMask Unveils US Payment Card With Mastercard and On-Chain Rewards

MetaMask launches a US payment card with Mastercard, offering on-chain rewards and a metal card option enabled by Baanx and CompoSecure. MetaMask has introduced
Share
LiveBitcoinNews2026/02/27 13:00
Pi Network ARC-314 Update: Building a Decentralized Fortress with 421,000+ Nodes

Pi Network ARC-314 Update: Building a Decentralized Fortress with 421,000+ Nodes

    Pi Network continues to advance its mission to create a truly decentralized financial ecosystem with the AR
Share
Hokanews2026/02/27 13:46
FCA, crackdown on crypto

FCA, crackdown on crypto

The post FCA, crackdown on crypto appeared on BitcoinEthereumNews.com. The regulation of cryptocurrencies in the United Kingdom enters a decisive phase. The Financial Conduct Authority (FCA) has initiated a consultation to set minimum standards on transparency, consumer protection, and digital custody, in order to strengthen market confidence and ensure safer operations for exchanges, wallets, and crypto service providers. The consultation was published on May 2, 2025, and opened a public discussion on operational responsibilities and safeguarding requirements for digital assets (CoinDesk). The goal is to make the rules clearer without hindering the sector’s evolution. According to the data collected by our regulatory monitoring team, in the first weeks following the publication, the feedback received from professionals and operators focused mainly on custody, incident reporting, and insurance requirements. Industry analysts note that many responses require technical clarifications on multi-sig, asset segregation, and recovery protocols, as well as proposals to scale obligations based on the size of the operator. FCA Consultation: What’s on the Table The consultation document clarifies how to apply rules inspired by traditional finance to the crypto perimeter, balancing innovation, market integrity, and user protection. In this context, the goal is to introduce minimum standards for all firms under the supervision of the FCA, an essential step for a more transparent and secure sector, with measurable benefits for users. The proposed pillars Obligations towards consumers: assessment on the extension of the Consumer Duty – a requirement that mandates companies to provide “good outcomes” – to crypto services, with outcomes for users that are traceable and verifiable. Operational resilience: introduction of continuity requirements, incident response plans, and periodic testing to ensure the operational stability of platforms even in adverse scenarios. Financial Crime Prevention: strengthening AML/CFT measures through more stringent transaction monitoring and structured counterpart checks. Custody and safeguarding: definition of operational methods for the segregation of client assets, secure…
Share
BitcoinEthereumNews2025/09/18 05:40