Сrypto exchanges Coinbase CEO Brian Armstrong has been one of the loudest critics. In a post on X, he accused big banks of lobbying to strip away consumer protections that allow users to earn yield on stablecoins. He argued this push runs directly against the spirit of the GENIUS Act, which was passed earlier this year to safeguard consumer rights.
I've never been more bullish about clear rules for crypto... But that hasn't stopped the big banks from coming for another handout — this time paid by your crypto rewards. They want to undo your right… pic.twitter.com/hmPYmagDhj
— Brian Armstrong (@brian_armstrong) September 29, 2025
‘Restrictions Favor Banks, Not Consumers’
Armstrong says the proposed rules hand banks an edge at a time of record profits—while stripping users of a core perk of digital assets: earning yield on USDC and other stablecoins. He frames it as a litmus test for lawmakers: will they defend consumer rights or bank interests?
The GENIUS Act (passed in July) banned deposit-style interest on stablecoins, but it didn’t touch rewards. Now banks want to extend that ban to crypto exchanges, arguing rewards are just interest by another name. The CLARITY Act markup was pushed back amid shutdown fears, and it’s unclear if it’ll pass by year-end.
Crypto Industry Pushes Back
The crypto community is pushing hard in the other direction. The Blockchain Association launched a campaign to defend the GENIUS Act, and CEO Summer Mersinger urged Congress not to reopen settled provisions.
Their case: stablecoins enable fast, low-cost cross-border payments and broaden access to finance. Rewards, they argue, are a key feature of DeFi—an alternative to bank products, not a clone of them.
Banking Lobby Pressure
Banks counter that widespread stablecoin rewards could siphon deposits and weaken their capacity to lend. The Bank Policy Institute warns stablecoins are creeping toward bank-like functionality, raising systemic risks.
1/ The GENIUS Act is under attack from Big Banks, who want to unravel the law to better protect their businesses, robbing everyday consumers of innovative new products and services.
— Blockchain Association (@BlockchainAssn) September 29, 2025
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With the GENIUS Act already blocking interest payouts, banks now label stablecoin rewards a “dangerous loophole.” The U.S. Treasury has even warned that up to $6.6 trillion could flow out of banks chasing better yields in crypto.
The Bigger Picture
This fight runs deeper than rewards—it’s about who gets to define the future of money. If lawmakers back consumers and innovation, DeFi and banks may find a way to coexist. If not, brace for a long battle for dominance and a potential shake-up of financial power