Stablecoin

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A senior executive at Coinbase warned that changes to the US stablecoin framework could weaken Washington’s position in the global race for digital payments, just as China moves to make its central bank digital currency (CBDC) more competitive.
In a post on X, Faryar Shirzad, Coinbase’s chief policy officer, said the debate over whether US-issued stablecoins can offer “rewards” under the GENIUS Act could hurt US dollar stablecoins’ global competitiveness. He pointed to a recent <a href="https://cointelegraph.com/news/china-digital-yuan-interest-wallets-2026">announcement from China’s central bank</a> as evidence that rival financial systems are moving quickly to enhance the appeal of state-backed digital money.
The People’s Bank of China, China’s central bank, this week outlined a framework that will allow commercial banks to pay interest on balances held in digital yuan wallets starting Jan. 1, 2026. Lu Lei, a deputy governor at the PBOC, said the change would move the e-CNY beyond its original role as a digital cash substitute and integrate it into banks’ asset and liability management.
“The digital RMB will move from the digital cash era to the digital deposit currency (Digital Deposit Money) era,” said Lei in the report. “It has the functions of monetary value scale, value storage, and cross-border payment.”
<h2 id="stablecoin-reward-debate-raises-competition-fears">Stablecoin reward debate raises competition fears</h2>
The <a href="https://cointelegraph.com/learn/articles/genius-act-how-it-could-reshape-us-stablecoin-regulation">GENIUS Act</a>, which <a href="https://cointelegraph.com/news/us-senate-passes-genius-act-stablecoins">passed in June</a>, established reserve and compliance rules for stablecoins while prohibiting issuers from paying direct interest. The law, however, allows platforms and third parties to offer rewards linked to stablecoin use.
Related: <a href="https://cointelegraph.com/explained/what-the-310b-stablecoin-market-reveals-about-crypto-adoption" title="https://cointelegraph.com/explained/what-the-310b-stablecoin-market-reveals-about-crypto-adoption">What the $310B stablecoin market reveals about crypto adoption</a>
“If this issue is mishandled in Senate negotiations on the market structure bill it could hand our global rivals a big assist in giving non-US stablecoins and CBDCs a critical competitive advantage at the worst possible time,” Shirzad warned.
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 <img alt="Coinbase exec warns Senate stablecoin misstep could hand China global edge" src="https://s3.cointelegraph.com/uploads/2025-12/019b7346-61e6-74ae-8592-d08d983127de.PNG" title="">
 <figcaption style="text-align: center;">
 Faryar Shirzad warns against changing the GENIUS Act. Source: <a href="https://x.com/faryarshirzad/status/2006056639049191915" rel="nofollow noopener" target="_blank" title="https://x.com/faryarshirzad/status/2006056639049191915">Faryar Shirzad</a>
 </figcaption>
</figure>
The warning comes as industry figures voice concerns about bank lobbyists trying to reopen the GENIUS Act. “Now the banking lobby wants to reopen it,” crypto policy commentator Max Avery <a href="https://x.com/realMaxAvery/status/2001745678083506425" rel="noopener nofollow" target="_blank">said</a> in a post last week.
Avery pointed out that while banks currently earn around 4% on reserves parked at the Federal Reserve, consumers often receive close to zero on traditional savings accounts. Stablecoin platforms, he said, threaten that model by offering to share some of that yield with users.
Related: <a href="https://cointelegraph.com/explained/the-crypto-events-that-reshaped-the-industry-in-2025">The crypto events that reshaped the industry in 2025</a>
<h2 id="coinbase-ceo-calls-genius-act-a-red-line">Coinbase CEO calls GENIUS Act a “red line”</h2>
Last week, Coinbase CEO Brian Armstrong said any attempt to reopen the GENIUS Act would <a href="https://cointelegraph.com/news/coinbase-ceo-genius-act-red-line-bank-lobbying-stablecoins">cross a “red line,”</a> accusing banks of lobbying Congress to limit stablecoin rewards in order to protect their deposit base. He said Coinbase would continue to oppose efforts to revise the law, adding that he was surprised such lobbying was happening so openly.
Armstrong also argued that banks are misjudging the issue, predicting they will eventually push to offer interest and yield on stablecoins themselves once the opportunity becomes clear. He described the current lobbying effort as “unethical,” saying it would ultimately fail.
Magazine: <a href="https://cointelegraph.com/magazine/crypto-bull-run-ending-profits-hodl-ferrari-crypto-kid-efe-kelemci/">If the crypto bull run is ending… it’s time to buy a Ferrari — Crypto Kid</a>

Coinbase exec warns Senate stablecoin misstep could hand China global edge

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