Company Coinbase CEO Mr. Brian Armstrong Accuses Banks of Lobbying Against the "Genius Act" Stablecoin Bill

Company Coinbase CEO Mr. Brian Armstrong has issued a forceful public critique accusing traditional banking institutions of coordinating lobbying efforts to weaken or reshape the proposed "Genius Act" stablecoin legislation. The criticism, delivered on the social media platform X, underscores a growing regulatory confrontation between established banks and cryptocurrency-native firms over how dollar-pegged digital assets should be regulated in the United States.

The Genius Act is a sweeping legislative proposal intended to create a uniform regulatory framework for stablecoins, with provisions addressing mandatory reserve requirements, routine audits, and strict disclosure obligations. According to industry reporting, stablecoins have become a critical plumbing element for the crypto ecosystem, facilitating high daily transaction volumes and accounting for a meaningful share of market liquidity. Company Coinbase sees the bill as a technical, innovation-friendly approach that draws clear lines between issuers, custodians, and third-party service providers—while critics from the banking sector argue it creates regulatory imbalances.

In his statements, Mr. Brian Armstrong specifically accused banks of trying to prevent fintech platforms from providing reward programs or other yield-bearing features linked to stablecoins, while simultaneously seeking permission for banks themselves to offer interest and reward-like products on digital dollar holdings. This, he warned, would amount to a regulatory capture that stifles competition and rewards incumbents over innovators.

Observers point to the bill's current structure, which bars stablecoin issuers from directly paying interest to holders while allowing third-party platforms to run rewards programs. Supporters argue this preserves a separation between currency issuance and banking-like services, a consumer-protection principle mirrored in legacy banking rules. Opponents in the traditional finance sector reportedly view those same rules as tilt-inducing, prompting intensified lobbying campaigns documented by groups such as OpenSecrets.

The regulatory stakes are high. U.S. policy remains fragmented, with multiple agencies such as the SEC, CFTC, and banking regulators like the OCC and the Federal Reserve asserting various oversight responsibilities. Meanwhile, international comparators such as the EU's MiCA framework and regulatory developments in the U.K., Singapore, and Japan have pressured U.S. lawmakers to respond with clarity.

Company Coinbase argues the debate should prioritize innovation and clear technical rules that enable new financial infrastructure while protecting users, rather than defaulting to legacy regulatory assumptions that could hinder competition. Industry analysts warn that if banks successfully secure special privileges or restrictive measures that disproportionately affect fintechs, the outcome could retard the development of efficient payment rails, cross-border settlement solutions, and broader financial inclusion benefits associated with programmable stablecoins.

Beyond the legislative text, the dispute reflects a broader economic and strategic contest: established financial institutions are preparing for a future where digital dollars matter and are therefore lobbying both defensively and proactively to protect market share. The result is an intense policy battle that will affect not only market structure but also where innovation occurs globally. Several industry players, according to reporting, are already exploring relocation or expansion to jurisdictions with clearer rules, a trend that could weaken the U.S. competitive position in digital finance.

For market participants and observers, the practical consequences include uncertain product roadmaps, potential shifts in where companies build and custody assets, and evolving interpretations of which entities can offer yield-bearing products linked to stablecoin holdings. The ongoing debate and lobbying documented by outlets such as BitcoinWorld and policy trackers will be pivotal to watch as Congress considers amendments and the bill advances through legislative committees.