Coinbase CEO Warns Banks Not to Reopen the GENIUS Act

Coinbase Chief Executive Officer Brian Armstrong spoke out on December 27, advising banks against attempting to reopen the GENIUS Act, warning that doing so would cross a red line.

Armstrong said in a post on X that he is impressed that “banks can lobby for this with a straight face and not get kicked out of senators’ offices,” adding, “We won’t let anyone reopen GENIUS. Red line issue for us. And will keep advocating for our customers and the crypto industry.”

With him being firmly against this, Coinbase will actively oppose efforts to revise the law. He also argued that reopening the legislation would stall innovation rather than help protect consumers, framing the push as a defensive move by incumbents, rather than a response to genuine risk.

Speaking on his prediction on what would happen next, he said: “My prediction is the banks will actually flip and be lobbying FOR the ability to pay interest and yield on stablecoins in a few years, once they realize how big the opportunity is for them. So it’s 100% wasted effort on their part (in addition to being unethical).”

GENIUS Act Is Still Highly Debated In The Financial Industry

The GENIUS Act was originally passed after months of negotiation, and its role is to prevent stablecoin issuers from paying interest directly to users. However, it also allows platforms and various third parties to offer rewards using other mechanisms. 

This is an important distinction that has enabled crypto exchanges, wallets, and even fintech apps to share yield generated from reserves without needing issuers to offer interest themselves.

The law saw a lot of criticism, although many argued that this structure strikes a balance between consumer protection and innovation. Supporters in the banking sector also said it still leaves room for competition, which they view as uneven.

Now, the main debate revolves around whether rewards should be limited as well. Armstrong’s comments came in the middle of it all, and they suggest that Coinbase sees any broader restrictions as an attempt to shut down indirect yield-sharing completely. This would cut off one of the clearest consumer-facing advantages that stablecoin platforms have over traditional savings products.

It is also worth noting that the fight regarding the GENIUS Act comes as lawmakers find themselves amid a debate regarding a wider set of crypto rules. Only a week earlier, US legislators released a discussion draft that was meant to ease the tax burden on everyday crypto use. The proposal would exempt stablecoin payments of up to $200 from capital gains taxes, allowing for easier routine spending.