A senior govt at Coinbase warned that modifications to the US stablecoin framework may weaken Washington’s place within the international race for digital funds, simply as China strikes to make its central financial institution digital foreign money (CBDC) extra aggressive.
In a put up on X, Faryar Shirzad, Coinbase’s chief coverage officer, mentioned the talk over whether or not US-issued stablecoins can supply “rewards” below the GENIUS Act may damage US greenback stablecoins’ international competitiveness. He pointed to a latest announcement from China’s central bank as proof that rival monetary programs are shifting shortly to reinforce the enchantment of state-backed digital cash.
The Folks’s Financial institution of China, China’s central financial institution, this week outlined a framework that may permit industrial banks to pay curiosity on balances held in digital yuan wallets beginning Jan. 1, 2026. Lu Lei, a deputy governor on the PBOC, mentioned the change would transfer the e-CNY past its unique function as a digital money substitute and combine it into banks’ asset and legal responsibility administration.
“The digital RMB will transfer from the digital money period to the digital deposit foreign money (Digital Deposit Cash) period,” mentioned Lei within the report. “It has the features of financial worth scale, worth storage, and cross-border fee.”
Stablecoin reward debate raises competitors fears
The GENIUS Act, which passed in June, established reserve and compliance guidelines for stablecoins whereas prohibiting issuers from paying direct curiosity. The legislation, nevertheless, permits platforms and third events to supply rewards linked to stablecoin use.
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“If this concern is mishandled in Senate negotiations available on the market construction invoice it may hand our international rivals a giant help in giving non-US stablecoins and CBDCs a important aggressive benefit on the worst potential time,” Shirzad warned.
The warning comes as trade figures voice considerations about financial institution lobbyists attempting to reopen the GENIUS Act. “Now the banking foyer needs to reopen it,” crypto coverage commentator Max Avery said in a put up final week.
Avery identified that whereas banks presently earn round 4% on reserves parked on the Federal Reserve, customers usually obtain near zero on conventional financial savings accounts. Stablecoin platforms, he mentioned, threaten that mannequin by providing to share a few of that yield with customers.
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Coinbase CEO calls GENIUS Act a “purple line”
Final week, Coinbase CEO Brian Armstrong mentioned any try and reopen the GENIUS Act would cross a “red line,” accusing banks of lobbying Congress to restrict stablecoin rewards in an effort to shield their deposit base. He mentioned Coinbase would proceed to oppose efforts to revise the legislation, including that he was shocked such lobbying was occurring so brazenly.
Armstrong additionally argued that banks are misjudging the difficulty, predicting they are going to finally push to supply curiosity and yield on stablecoins themselves as soon as the chance turns into clear. He described the present lobbying effort as “unethical,” saying it will finally fail.
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Cointelegraph by Amin Haqshanas Coinbase Warns Stablecoin Rules Could Hand China an Edge cointelegraph.com 2025-12-31 07:41:17
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