Brian Armstrong, the Coinbase CEO, personally strolled into the Capitol on Thursday to defend what he saw as a direct threat to his company's bottom line. His mission? To safeguard the stablecoin rewards that keep users glued to the platform. No proxies here—Armstrong did the legwork himself as a Senate committee prepared to vote on a bill that could have axed those rewards entirely.
Just a day earlier, Armstrong had taken to social media to blast the proposal. His online tirade worked wonders: within hours, Senate Banking Chair Tim Scott yanked the bill from the agenda. That single post managed to derail legislation years in the making. Armstrong later told reporters that while Coinbase had multiple gripes with the bill, the 'maybe the biggest' issue was bank lobbyists sneaking in language to kill reward programs outright. This, he argued, would leave crypto platforms like his at a severe disadvantage compared to traditional banks.
Armstrong called it illogical to push the bill forward amid ongoing amendments that could eliminate reward payouts completely. He urged lawmakers to go back to the drawing board and craft something more balanced. Stablecoins—those dollar-pegged digital assets—have exploded into a lucrative business for Coinbase, especially after the GENIUS Act, signed into law by President Donald Trump last year, kicked off its rollout. These rewards are both profitable and popular with users, but they're a thorn in the side of banks.
Bankers and their lobbyists have been aggressively pressuring senators from both parties to ban rewards that mimic interest payments. Their worry is straightforward: if stablecoins offer real returns while bank accounts yield next to nothing, customers might migrate their funds en masse. That could drain bank deposits, crimping their lending power—particularly for small businesses relying on local lenders. One early draft of the bill tried to strike a compromise by prohibiting yield but permitting other incentives, like spending-based rewards. Yet some senators weren't satisfied and pushed for a blanket ban on all stablecoin rewards.
Armstrong wasn't about to let that slide. The crypto industry emerged as the top corporate donor in the 2023-2024 election cycle, with Coinbase contributing $1 million to Trump's inauguration and chipping in for his White House ballroom renovation.
