Coinbase CEO Brian Armstrong has publicly defended China's policy of paying interest on its central bank digital currency (CBDC), the digital yuan, framing it as a competitive advantage that the United States should emulate. On January 8, 2026, Armstrong took to social media platform X to state, "China has decided to pay interest on its own stablecoin, because it benefits ordinary people, and they recognize it as a competitive advantage. I worry we are missing the forest through the trees in the US."
Armstrong's comments are a direct intervention in an intense US lobbying war over stablecoin regulation. The debate centers on the GENIUS Act, passed in July 2025, which prohibited stablecoin issuers from paying interest directly but allowed third-party platforms like Coinbase to share yields through "rewards" programs. This provision is now under threat, as banking groups led by the American Bankers Association and over 200 community banks are lobbying regulators and lawmakers to eliminate this "loophole," arguing it could trigger deposit outflows threatening up to $6.6 trillion in lending capacity.
Armstrong and Coinbase Chief Policy Officer Faryar Shirzad have pushed back aggressively. They argue that stablecoin rewards benefit consumers and do not harm bank lending, citing studies from Cornell University and Charles River Associates that found no link between stablecoin growth and bank deposit outflows. Shirzad accused US banks of opposing competition, noting they earn over $360 billion annually from deposits and card fees. Armstrong has called any attempt to reopen the GENIUS Act a "red line."
The comparison to China's digital yuan has been met with criticism and clarification. Crypto analyst Phyrex and others noted that Armstrong's framing contains a "fundamental error": the digital yuan is a sovereign CBDC, not a private stablecoin like USDC or USDT. The interest payments on the digital yuan, which took effect January 1, 2026, are reportedly subsidized by commercial banks and are seen by some analysts as a response to low adoption rates, not a sign of competitive strength.
Despite the flawed analogy, Armstrong's broader point is that the US risks falling behind in financial innovation. Shirzad warned, "The Senate banning rewards would be a big assist to China's efforts." The issue is poised for review as the US Senate Banking Committee prepares to examine the Market Structure bill, which may include restrictions on stablecoin rewards.
