Top Highlights
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Regulatory Overreach: Coinbase criticizes US banking associations for pushing to ban third-party stablecoin incentives, claiming it stifles competition and consumer choice.
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Misinterpretation of Law: The banking lobby’s request contradicts the GENIUS Act’s intent, which only forbids issuers from paying interest, not merchants providing benefits.
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Possible Consequences: Adopting the banks’ proposal could lead to widespread bans on common practices such as discounts and payroll perks, harming consumers and merchants.
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Stablecoin Growth Potential: US Treasury Secretary highlights stablecoins could expand tenfold by 2030, positioning them as vital for federal financing and benefiting exchanges like Coinbase.
Coinbase Exec Criticizes Banking Lobby’s Stablecoin Proposal
Coinbase has taken a firm stand against major US banking associations. These banks have urged federal regulators to ban merchant rewards, cashbacks, and discounts when customers pay with stablecoins. They argue that these perks act as “indirect interest.”
Faryar Shirzad, Coinbase’s chief policy officer, labeled the proposal as “unamerican.” He warned that it threatens competition and restricts how consumers manage their money. This debate centers on the GENIUS Act, a federal law enacted in July 2025. This law prohibits stablecoin issuers from paying interest to holders. However, banking groups want an expanded interpretation that would also limit third-party benefits for businesses accepting stablecoins.
According to the Coinbase Institute, the banks misinterpret the law. They claim the act only bans stablecoin issuers from paying interest, not the behavior of independent merchants. The Institute argues that banking lobbyists are seeking to protect their profits and maintain a fee-heavy payment system. Last year, US merchants paid over $180 billion in card fees, and limiting stablecoin usage could slow innovation and increase costs for both consumers and merchants.
Shirzad explained that common sense should prevail in this discussion. He emphasizes that consumers should freely decide how to use their funds after acquiring stablecoins.
Furthermore, US Treasury Secretary Scott Bessent noted that the stablecoin market, currently valued around $315 billion, could potentially grow tenfold by 2030. He highlighted the significance of stablecoins in federal financing, suggesting they will play a crucial role in the nation’s financial future.
This potential surge in stablecoin adoption could also benefit centralized exchanges like Coinbase, increasing trading activity and signaling a new era for digital finance.
As the discussion evolves, it highlights the need for clarity on regulations that can foster innovation while protecting consumer choices in the ever-changing landscape of finance.
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