Coinbase CEO Criticizes Major Banks Over Stablecoin Rewards Service Blockade

Coinbase CEO Brian Armstrong has recently voiced strong concerns regarding the actions of traditional banks, accusing them of deliberately obstructing access to Circle's USDC stablecoin rewards service. Through a direct message on social media platform X, Armstrong alleged that banks are attempting to protect their monopoly over deposits by undermining cryptocurrency-enabled services like stablecoin rewards.

"They are trying to invalidate the USDC rewards you are entitled to under the GENIUS Act. Don’t let this happen," Armstrong asserted in his post. He further criticized this behavior as politically misguided, particularly since traditional banks are already benefiting from record-high profitability. Armstrong highlighted that "50 million Americans are currently using cryptocurrencies," emphasizing the growing demand for digital asset solutions in the financial ecosystem.

A Battle Over Stablecoin Rewards Intensifies

Major banks have reportedly escalated efforts to limit stablecoin rewards offerings, leading to mounting friction between traditional financial institutions and the cryptocurrency industry. An October 29th report by U.Today revealed that several key cryptocurrency firms—including Coinbase, Kraken, Gemini, and BitGo—have intensified lobbying initiatives aimed at curbing these deliberate blockades by banks.

The Bank Policy Institute, a powerful advocate for traditional banking interests, has launched a campaign arguing that cryptocurrency exchanges should be prohibited from offering earnings on stablecoins. According to their stance, stablecoins pose a direct threat to the deposit and lending mechanisms upon which traditional banks rely.

Industry Pushback: Defending Financial Innovation

In response to mounting pressure from major banks, the Blockchain Association has unveiled a robust counter-lobbying campaign designed to protect the GENIUS Act, which underpins the legality of stablecoin rewards. This pro-cryptocurrency advocacy group argues that stablecoins contribute positively to the financial sector by streamlining the settlement process, enabling instantaneous transactions, and significantly reducing costs.

The Blockchain Association’s efforts reflect a broader industry sentiment that cryptocurrency innovations, such as stablecoins, are critical to modernizing outdated financial systems. Advocates note that restricting access to these tools will not only hinder technological progress but also deprive consumers of more efficient and affordable financial services.

Implications for the Future of Financial Services

The ongoing rivalry between traditional financial institutions and the cryptocurrency sector is emblematic of a larger struggle over the control and evolution of financial markets. Armstrong’s critique and the ensuing campaigns by industry groups highlight a growing determination to secure the future of digital assets within mainstream finance.

As this clash unfolds, the outcome will likely shape the trajectory of cryptocurrency adoption, stablecoin integration, and broader financial services innovation. The stakes are high, with potential repercussions for consumers, businesses, and the overall competitiveness of the financial ecosystem.